Theory of Change and Logic Model

Summary

A logic model for a theory of change outlines the basic sequential steps that must be completed in order to affect a desired social outcome. It starts with inputs and ends with a set impact, which is defined by the authors of "Measuring the “Impact” in Impact Investing" according to the Kellog Foundation definition: "impact refers to change occurring in communities or systems."

Part of Solution

  • How Impact Investors Actually Measure Impact

  • Additional Information

    From pp. 19 of report

    Spotlight: Acumen

    Acumen is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of poverty. The aim is to help build financially sustainable organizations that deliver affordable goods and services that improve the lives of the poor.

    Mapping out theory of change is core to how Acumen understands the depth dimension of their impact, which Acumen describes as addressing the question of “how much and in what way has someone’s life changed?” Acumen does this by employing their version of a logic model framework to map out an investee’s theory of change. It is a core tool in thinking and communicating about their work’s depth of social impact.

    Mapping the theory of change helps Acumen in identifying and predicting to what degree of the work by investee impacts the lives of their target customers. In addition, Acumen highlights three other purposes of using their theory of change framework:

    • Identify assumptions: By digging deeper into the theory of change, Acumen is able to identify key assumptions required to get to the outcomes on the logic model. It uncovers the beliefs that the investment team would have to hold to believe in the investee’s projected impact.
    • Identify areas in need of further evidence review: Uncovering these key assumptions allows Acumen to identify areas that are in need of a further evidence review, and key data that they would like to collect over time to verify that the theory of change holds. The Acumen team begins to answer this by looking at existing literature on the topic, and may combine it with primary research about the specific case in question if possible to form an educated opinion.
    • Consider impact risk: Acumen refers to impact risk as factors that could jeopardize the expected social impact of an intervention, often found in the assumptions between “output” and “outcome”, and in the assumptions between “outcome” and “impact”. For each of their investments, the Acumen team outlines what they think are the biggest impact risks, then come up with risk mitigation strategies to monitor and manage any potential challenges. Understanding impact risk is seen as vital to measuring and ensuring long term impact, and the up-front analysis allows the team to be better prepared.

    The Acumen team has adopted their own version of a logic model that best suits their types of investments, and also developed guidelines to identify common assumptions. This model is illustrated in a image attached in the image section below:

    Photos

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    • Domino cascade

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