How social investors assess impact

Impact assessment is a key part of the social investment due diligence process and should have parity with financial assessment.


Many investors are now publishing their impact assessment approaches. This is good from a customer perspective because it helps charities and social enterprises to identify the information that they will need about social impact from the outset.

Most investors have their own impact assessment approach to reflect the specific aims and objectives of their capital but there is common ground across them all. In short, social impact assessment is mainly focused on what  you intend to change and how will you deliver it.  

Here are my top tips for assessing social impact:

  1. Does that organisation have a clear understanding about the need it is trying to address and the broader context for its work?
  2. Does the organisation have a strategy for creating impact which details activities, outputs, outcomes and indicators? This could be presented as a theory of change or logic model.
  3. Who are the people that will benefit from the organisations work? How are they involved in developing and shaping services? Are the services inclusive?
  4. What is the depth or breadth of impact that will be delivered?
  5. What evidence does the organisation have about the effectiveness of its work? How does the organisation measure impact and use the evidence to learn, improve or influence?
  6. What is the level of impact risk? Does the organisation have a track record or is it new? What external factors could have an impact on its work or what negative impact could occur?
  7. Are the services provided additional? Would the outcomes happen anyway if the services were not delivered? Will the service displace the work of other organisations?  
  8. How does the work of the organisation compare or complement to what is already available?
  9. Does the organisation have the right team and skills in place and appropriate governance? How are service users involved in decision making?
  10. What will happen when the investment ends? How will outcomes continue to be delivered?

Our Social Impact Tests provide further information about how we assess proposals from intermediaries for investment. The tests can also be adapted by intermediaries for assessing the impact of potential deals with charities and social enterprises.