In the discussion on social investments, concepts such as effect, outcome, and impact are used to describe the expected positive result of preventive and proactive interventions. The question is if these concepts are synonyms and if not, how they are related?

The logic model, also called the theory of change, serves as a suitable tool in the orientation of these concepts. The theory of change can have both a project-specific and a general application. It illustrates the cause-and-effect chain between the identified need, the desired change and the resources and activities used to achieve it. This structure can be used to systematically form hypotheses on how to approach a certain need, and to define metrics and processes to evaluate the practical application of the theory. The below figure illustrates the main components of the theory of change:

To SHIC, it is important to consider the entire logic model and to support the method-and capacity building that enables this. Today, a large proportion of the management, monitoring, and evaluation is activity based as opposed to outcome and impact based.

Why do we focus on outcomes and not impact alone? In assessing the role of the Social Outcomes Contract, it is important to have realistic expectations to what is achievable through isolated and temporally finite interventions. A single or a small number of Social Outcomes Contract do not have potential to lead to real impact or system change but further steps need to be taken. In this context, outcomes refer to the objective and predefined measures that are monitored within the scope of the project and determine the effects of the intervention in question. Impact is more difficult to measure and to achieve as it is often subjective in nature or imply organizational changes that happen over a longer period of time.

To measure outcome can provide an understanding if a specific intervention was effective and if it implied a positive change for the target group and other parties in the project. However, to contribute to positive societal development, a strategy on how isolated investments can lead to a socially and economically sustainable use of resources in the long run is needed. Outcomes and impact should not be considered two separate goals but rather mutually dependent, should the theory of change be accurate. The key to achieve the last step is implementation and transmission. Implementation means that learnings of fruitful methods and positive observed outcomes are translated into new practices for the actors concerned. Transmission means improved practices even for those actors not immediately involved in the intervention.

To ensure that positive outcomes lead to impact we see three important and mutually dependent components:

  1. The design of the intervention is foregone by a robust pre-study providing a comprehensive understanding of the situation of the target group. The pre-study should include both context specific experiences as well as evidence on causal links between the outcome measure and societal impact. The pre-study should be conducted in collaboration with the public actor(s) responsible for the specific societal challenge.
  2. During the intervention, project monitoring and evaluation should be carried out in close collaboration with the project owner to ensure a common learning experience for all parties in general, and capacity building for the public part in particular.
  3. Transfer of competences and the construction of an organizational infrastructure specifically aimed at implementing new methods should be ensured

By making sure implementation takes place in collaboration with the public actor, the conditions for a successful transfer of competences that reaches beyond the scope of the project and a positive impact increases significantly.  

In the pre-study where the needs of the target group are determined, the first three components of the chain of logic: resources, activities, and performance measures are considered. Through a distinct definition and evaluation of outcome measure, the design of a contract model that ensures incentive for all parties’ of the contract to fulfill their commitment, along with an adaptive monitoring method that enables continuous adjustments, the desired outcome is assured in the short run. The long-term effect, the impact, is achieved when learnings are converted to organizational changes through scaling of efficient methods. Policy implications are for example changed principles for financing, monitoring, or recommendations of successful methods.