The demand for evaluation of social impact has reached an unprecedented level. Interestingly, though, the evaluation profession has hefty competition in its home-field among a rising profession of “impact analysts,” and may not have the home field advantage. Why has demand for evaluation increased? Who is competing with the evaluation profession? And why don’t evaluators have the home-field advantage?
The rising demand stems from the growth of impact investors and other market-based actors who are now moving alongside traditional social-sector actors into the social impact space. The launch of the post-2015 Sustainable Development Goals (SDGs) has prompted new discussions around financing for international development, and a new set of actors from across the private sector has emerged to complement the social-sector focus more traditionally typical of bilateral government aid agencies, and international NGOs. These new actors include a range of investors, such as managers from private equity funds and nonprofit impact funds. Increased activity among established segments, such as development finance institutions (DFIs), foundations and corporations is occurring simultaneously.
These groups have varying motivations and goals. They also bring a diverse understanding of the context, opportunities and risks around social and environmental issues, including the issue of measuring and evaluating impact. Evaluation professionals, trained in social-science methods, have a robust history and an experience base dating back to the 1950s of developing methodologies that assess complex social change initiatives. However, mindsets and methods do not take into account the culture, context, business model, and priorities that shape the thinking and actions of the new actors on the scene. And this gap between professions risks becoming an Achilles heel for the emerging impact-investment industry. A recent study conducted by Monitor 360 –Narrative Analytics on Impact Investing–(Monitor-360.com) identified lack of confidence in measurement approaches as the number one concern about this industry—although, importantly, this concern was less prominent than were the positive sentiments the industry received.
There is much work to be done to optimize the exchange between market-based actors in social impact assessment and the profession of evaluation in both developed and developing countries. Looking ahead, the traditional evaluation field and the market-based impact measurement field both can benefit from intentional cross-fertilization which, in turn, can result in shared interest and joint development of new mindsets and practices.