Locus is applying a refreshed approach to impact management and measurement.
In 2025, we’re launching a new impact scorecard to help assess the depth and breadth of our financing’s impact, ensuring our capital supports projects that create meaningful community benefits. Built around the five dimensions of impact, this tool will help us prioritize investments that align with our mission and drive positive change.
Our Approach to Measuring Impact
As a mission-driven CDFI, we strive to maximize the positive impact of every dollar we lend. To ensure we’re making thoughtful, targeted investments, we’ve developed an Impact Rating Tool that evaluates each project across six carefully designed dimensions.
This marks the next chapter in our journey of impact measurement. Locus first developed an Impact Rating Tool more than 10 years ago, paving the way for a more structured approach to evaluating the potential impact of a loan. This latest iteration represents a comprehensive update, aligning more closely with industry standards, including the Impact Management Project’s five dimensions of impact, while tailoring the framework to reflect our unique priorities and values.
As we launch this new tool, we are hopeful it will help us answer these fundamental questions:
- What loans make the most impact, and how do we know?
- How can we direct resources to more High Impact loans?
- How can our learnings inform new products, policies, or services?
The Six Dimensions
Our impact rating is guided by six key dimensions, inspired by the Five Dimensions of Impact plus a sixth Locus-specific dimension around strategic alignment. This ensures our investments create lasting, meaningful impact for the communities we serve.
1. Community Focused – What is the intended benefit to the community?
This dimension assesses how well a project addresses the needs and priorities of the community it serves. We ask questions about the tangible benefits provided, such as the creation of affordable housing, small business growth, or access to essential community services. Our goal is to advance community identified priorities and this dimension helps us stay true to that.
2. People & Place – Who benefits from our investment?
Here, we evaluate the beneficiaries of the project and their specific needs. Does the project serve low-income, underserved, or disadvantaged populations? Does it benefit a historically underfunded area? This dimension ensures that our investments uplift those who need it most.
3. How Much – What is the scale, depth, and duration of the impact?
We measure the scale, depth, and duration of the impact, considering the number of people served, the significance of the benefits provided, and the expected duration of impact. For example, in affordable housing, we examine the total units created, the depth of affordability offered, and the extent to which that affordability is “locked” in for a significant duration. For small business loans, we assess the number and quality of jobs created and the likelihood that those jobs will endure.
4. Investor Contribution – How does Locus’ investment enable or enhance the project’s impact?
This dimension highlights our role as a catalytic lender. We look at how our funding fills gaps in the market, whether by offering flexible terms, taking on higher risk, or enabling a project that would not otherwise proceed.
5. Impact Risk – What is the likelihood that the intended impact will not be achieved as expected?
Not all projects are created equal, and we carefully consider the risks that could reduce or undermine the intended impact. We assess factors such as the borrower’s track record, the alignment between project goals and community needs, and the potential for unintended outcomes.
6. Strategic Alignment – How well does the investment align with Locus’ strategic priorities and focus areas?
This final dimension ensures that the project aligns with our organizational mission and priorities. For instance, we prioritize projects that meet CDFI Target Market criteria, CRA Community Development criteria, and qualified areas under the Emergency Capital Investment Program. We also prioritize projects that will be originated under special loan programs or funding sources and those that align with our Place Based Investment Strategy.
Why It Matters
Our Impact Rating Tool helps us allocate resources where they can do the most good.
By evaluating each project through these six dimensions, we ensure that our lending delivers measurable outcomes and aligns with our mission to create lasting change.
This enhanced tool underscores our commitment to being at the forefront of impact-driven lending, building on over a decade of experience to ensure that every project we finance contributes meaningfully to the communities we serve.
Want to learn more? Download our full Impact Report here.