Theory of Change

Theory of Change

We believe that understanding and interrogating the theory of change of a program, fund, investment or company is central to accurately and usefully evaluating impact investing. Depicting this theory visually, examining actual performance against the theory, analyzing the variance, are key steps in this process that can yield insights and lessons for improving the performance of the intervention, scaling it up, or terminating it altogether.

Our thinking on theory of change is set out in the journal article entitled “Interrogating the Theory of Change: Evaluating Impact Investing Where It Matters Most.” Published in the Journal of Sustainable Finance and Investment, the paper, with nearly 4,000 views, has become the journal’s most frequently read article.

To access the paper, click HERE


Impact Value Chain

The impact value chain is a logic model, a kind of theory of change, developed for and by the impact investing industry. Most recently, the Social Impact Investment Task Force, organized under the United Kingdom’s Presidency of the G8, used the impact value chain as a central concept and tool in its analysis of the industry’s structure, performance and potential.

Access the report of the Task Force


The Four Phases of Impact Measurement

The Social Impact Measurement Working Group of the G8 Social Impact Investment Task Force proposes four phases in the impact measurement process: plan (set goals, develop framework, select indicators); do (collect and store data, validate data); assess (analyze data); and review (report data, use data to make investment decisions). This is a cycle of activity that is particularly useful for adoption by investors.

For the Working Group’s report, click