Understanding evaluation practice within the context of social investment

Abstract

Social impact investing is the use of private investment to fund social programs in various public welfare sectors. It is currently unclear which evaluative practices are used to determine the impact of social investment. This study describes how impact investments are evaluated and the factors that help explain variations in practice through survey ( N = 161) and interview ( N = 13) data from investors, intermediaries, entrepreneurs, and analysts. Study findings indicate that analysts typically rely on descriptive quantitative and qualitative data and analyses. Analysts’ background, training, and role; perceptions of the goals of the work; and the complexity of a program’s theory influence their evaluation approach. More nuanced or indirect impacts of investments may not be captured because evaluation activities tend to be limited in scope and scale. Future research should explore the work of those directly responsible for impact activities to better understand the conditions under which more sophisticated evaluation approaches might be employed.