• Impact

    • IN EVALUATING

      Positive and negative, primary and secondary long-term effects produced by an intervention, directly or indirectly, intended or unintended.

    • IN EVALUATING

      A result or effect that is caused by or attributable to a project or program. Impact is often used to refer to higher level effects of a program that occur in the medium or long term, and can be intended or unintended and positive or negative.

    • IN GENERAL

      a) The action of one object coming forcibly into contact with another. b) A marked effect or influence.

    Commentary

    The Impact Management Project defines impact as “material effects experienced by people and planet, both positive and negative. Effects are material if they are deep and/or occur for many people and/or last for a long time, relate to important positive or negative outcomes and occur for people (or planet) who are not well-served in relation to those outcomes.”

    Different uses of “impact” give different weight to the importance of causality between an intervention and its effects and the measurability, breadth and timeframe of those effects. In the generic definition, the degree of influence, breadth of effects and timeframe are not specified.

    In evaluation, the narrow definition of impact refers to short and/or long-term effects that have been measured by comparing a group receiving an intervention to a control or comparator group, whereas the broader definition encompasses all long-term apparent effects of an intervention–intended and unintended, positive and negative–where causality is implied but not necessarily measured. Such differences and expectations as to what counts as an impact can be a source of misunderstanding, particularly in the context of the meaning and scope of an “impact evaluation”. One evaluator may use the term “impact” in the narrow sense, meaning an intervention that has a measurable, typically intended, effect. Others may use the broader definition, implying broader, longer-term effects that may neither be intended nor measurable. Currently businesses and impact investors that intend to generate positive social or environmental impacts typically do not imply or require the rigorous measurement implied by the narrow definition. Impact is sometimes added as a modifier to conventional words and phrases to signify application of that word or phrase only to social and / or environmental impacts (e.g., impact due diligence, impact risk, impact management).

     

  • Impact accounting (Noun)

    • IN ACCOUNTING

      No clear, authoritative definition found. See commentary.

    Commentary

    This is a case of using “impact” as a modifier to “accounting” to imply a method of accounting for social and environmental impacts, and a discipline and profession, that mirrors financial accounting. There is growing interest in approaches to impact accounting, with a corresponding growth in methods, guidance, and platforms. Nevertheless, the application of impact accounting lags far behind the application of financial accounting (which is a much older field).

  • Impact assessment

    • IN SUSTAINABLE DEVELOPMENT

      The process of identifying the future consequences of a current or proposed action.

    Practice & Source: (1) Sustainable development: International Association for Impact Assessment
    Commentary

    The term is often used to describe ex-ante predictions of social and / or environmental impacts of policy, planning, and business decisions, but it can also be used as a synonym for ex-post impact evaluations.

  • Impact chain

    • IN FINANCE

      The impact chain represents how a social purpose organization achieves its impact by linking the organization to its activities, and the activities to outputs, outcomes and impact. The impact chain forms the central line running through the impact plan.

    Commentary

    See “Logic model”.

  • Impact evaluation

    • IN EVALUATING

      A systematic study of the change that can be attributed to a particular intervention, such as a project, program or policy. Impact evaluations typically involve the collection of baseline data for both an intervention group and a comparison or control group, as well as a second round of data collection after the intervention, some times even years later.

    • IN EVALUATING

      An impact evaluation provides information about the impacts produced by an intervention – positive and negative, intended and unintended, direct and indirect. This means that an impact evaluation must establish what has been the cause of observed changes (in this case ‘impacts’) referred to as causal attribution (also referred to as causal inference).

    Practice & Source: (1) Evaluation: USAID Glossary of Evaluation Terms (2) Evaluation: BetterEvaluation
    Commentary

    The issue of whether an impact evaluation requires a control or comparator group is subject to debate among evaluators. Having a strong focus on attribution favors rigorous (typically experimental and quasi-experimental) quantitative methods that can be good at assessing causality. But such methods may limit the scope of an impact evaluation to only what can be measured under special conditions; are not always feasible or cost-effective given the complexity of the real world; and may, if experimental, raise ethical and sometimes legal concerns. Thus some evaluators argue for using alternative and / or complementary methods such as case studies and qualitative methods. See Broadening the range of designs and methods for impact evaluation by Stern et. al.

  • Impact first

    • IN FINANCE

      “Impact first” and its counterpart, “finance first”, are general concepts. There is no common, clearly defined point at which an investment approach shifts from impact first to finance first or vice versa.

    Practice & Source: (1) Finance/Impact investing: TriLinc Global Impact Investing Glossary
    Commentary

    “Impact first” and its counterpart, “finance first”, are general concepts. There is no common, clearly defined point at which an investment approach shifts from impact first to finance first or vice versa.

  • Impact investing

    • IN FINANCE/IMPACT INVESTING

      Impact investing is investing that aims to generate specific beneficial social or environmental effects in addition to financial gain. Impact investing is a subset of socially responsible investing (SRI), but while the definition of socially responsible investing encompasses avoidance of harm, impact investing actively seeks to make a positive impact by investing, for example, in non-profits that benefit the community or in clean technology enterprises.

    • IN FINANCE

      Investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate and premium returns. Although often associated with risk capital for small-scale, early stage enterprises, an investment is considered “impactful” provided the investor is committed to achieving a social or environmental benefit and to tracking and reporting progress.

    Practice & Source: (1) Finance/Impact investing: Investopedia (2) Finance / impact investing: TriLinc Global Impact Investing Glossary
    Commentary

    There is some ambiguity as to whether “impact investing” is defined simply by the intent of the investor to create a positive social and / or environmental impact, or whether the investments actually need to create such an impact. The latter implies verification as an essential part of the process.
    Impact investing and venture philanthropy belong in the overlap of two sets of activities: using money to generate more money and using money to create a positive impact on people’s lives. Though there is no clear dividing line between impact investing and venture philanthropy, generally the priorities and practices of impact investing are closer to mainstream investing while the priorities and practices of venture philanthropy are closer to philanthropy.

  • Impact investor

    • IN FINANCE

      No clear, authoritative definition currently exists. See commentary.

    Commentary

    Impact investors are individuals, companies, and funds who make investments into other companies, organizations, and funds with the intention of generating social and environmental impact alongside financial returns.

  • Impact management

    • IN SOCIAL ENTERPRISING

      No clear, authoritative definition currently exists. See commentary

    Commentary

    The Impact Management Project describes impact managment as “an ongoing process of figuring out which effects experienced by people and the planet are material, both positive and negative. Guided by this assessment, and our intentions and constraints, we set impact goals and financial goals. We put in place the governance and processes to deliver consistently on those goals but we also continue to learn about the experience of people and the planet and use that information to adapt our goals and improve.”

  • Impact map (Noun)

    • IN BUSINESS

      A table that captures how an activity makes a difference: that is, how it uses its resources to provide activities that then lead to particular outcomes for different stakeholders.

    • IN EVALUATING

      The impact map displays, in table format, the linkages among organizational goals and the desired results, critical actions, and key skills/ knowledge of a role.

    • IN BUSINESS/CSR

      An impact map is a visualization of scope and underlying assumptions, created collaboratively by senior technical and business people. It is a mind-map grown during a discussion facilitated by answering the following four questions: why? who? how? what?

    Commentary

    There are different types of impact maps used either for planning and/or evaluation. They are sometimes preferred over more linear causal models such as logic models, results chains, and logframes. The concept of impact maps was introduced by Dr. Robert O. Brinkerhoff as a tool to ensure that training was focused on the most organizational-critical skills and knowledge. Since then its use has been adapted. One important difference in types is whether they focus on the recipient of the impact or the creator of the impact.

  • Impact measurement (Noun)

    • IN FINANCE

      Measuring and managing the process of creating social and environmental impact in order to maximize and optimize it.

    Practice & Source: (1) Finance/Impact investing: EVPA Venture Philanthropy Glossary
    Commentary

    “Impact measurement” can be used in a narrow sense, meaning measurement of the immediate results of a logic model or results chain, without making an explicit judgment about causality. Or it can be used interchangeably with “impact assessment” which does involve an evaluative judgment (see “assessment”), and even to also imply management of impact (see the definition). “Impact measurement” is mostly, but not always, used when the impact of an intervention is thought to be direct, easily attributable with no or few unintended effects, and measurable in the short-term or in real-time. It is typically understood that “impact measurement” implicitly includes “social” and / or “environmental” though confusion can arise as to whether it means either or both.

  • Impact Reporting and Investment Standards (IRIS)

    • IN FINANCE

      The Impact Reporting and Investment Standards (IRIS) provide a common reporting language to describe social and environmental performance and ensure uniform measurement and articulation of impact across portfolios. The IRIS initiative defines terms to enable consistent reporting and allows benchmarking of data across companies, funds, investment portfolios and other organizations by serving as a repository for aggregated IRIS-compliant data. IRIS is an initiative of the Global Impact Investing Network.

    Practice & Source: (1) Finance/Impact investing: MIIS Impact: A Glossary for Impact Investing
    Commentary

    IRIS is a catalog of measures for investors and providers to use, rather than standards of measurement and reporting to follow, such as the International Financial Reporting Standards. IRIS also provides links to impact measurement guides.

  • Impact risk

    • IN FINANCE

      The likelihood that impact will be different than expected.

    Practice & Source: (1) Finance/Impact investing: Impact Management Project
    Commentary

    See commentary for “impact”. It is extremely unlikely that an intervention will have exactly the planned or expected impact. In practice, the term “impact risk” implies risks that are material from the perspective of stakeholders (i.e., “material impact risk”). Impact risk is higher when: i) small actions can have disproportionate impacts; (ii) there is uncertainty as to the key influences of impact; (iii) the intervention changes as it is implemented; iv) there is volatility and turmoil in the operating environment; (v) there are changes in the intervention design or in the authorizing environment; (vi) the operating environment changes in response to the intervention.

  • Impact thesis

    • IN FINANCE

      No clear, authoritative definition currently exists. See commentary.

    Commentary

    The term “impact thesis” is derived from the combination of “investment thesis” and “impact”. An impact thesis explains how activities and funding are expected to generate results likely to contribute to intended impacts. In impact investing, impact thesis is often used interchangeably with “theory of change,” though it is sometimes the case that though an impact investor has articulated an impact thesis, they have not developed a full-fledged theory of change.

  • Impact value chain

    • IN FINANCE

      No clear, authoritative definition. See commentary.

    Commentary

    A logic model used for impact investing, first described in 2004 by the Double Bottom Line Project Report: assessing social impact in double bottom line ventures. Also referred to in the 2014 report, Measuring Impact: Subject paper of the Impact Measurement Working Group of the G8 Social Investment Impact Taskforce.

  • Impairment

    • IN ACCOUNTING

      Impairment is an accounting principle that describes a permanent reduction in the value of a company’s asset, normally a fixed asset. When testing for impairment, the total profit, cash flow or other benefit that’s expected to be generated by a specific asset is periodically compared with that same assets book value. If it’s found that the book value of the asset exceeds the cash flow or benefit of the asset, the difference between the two is written off and the value of the asset declines on the company’s balance sheet.

    • IN GENERAL

      The state or fact of being impaired, especially in a specified faculty.

  • Implicit bias

    • IN GENERAL

      A term of art referring to relatively unconscious and relatively automatic features of prejudiced judgment and social behavior. While psychologists in the field of “implicit social cognition” study “implicit attitudes” toward consumer products, self-esteem, food, alcohol, political values, and more, the most striking and well-known research has focused on implicit attitudes toward members of socially stigmatized groups, such as African-Americans, women, and the LGBTQ community. For example, imagine Frank, who explicitly believes that women and men are equally suited for careers outside the home. Despite his explicitly egalitarian belief, Frank might nevertheless implicitly associate women with the home, and this implicit association might lead him to behave in any number of biased ways, from trusting feedback from female co-workers less to hiring equally qualified men over women. Psychological research on implicit bias is relatively recent, but a host of metaphysical, epistemological, and ethical questions about implicit bias are pressing.

    Practice & Source: (1) Generic: Stanford Encyclopedia of Philosophy
  • Income

    • IN ECONOMICS

      The flow of money to the factors of production: wages to labor; profit to enterprise and capital; interest also to capital; rent to land. Wages left for spending after paying taxes is known as disposable income.

    Practice & Source: (1) Economics: The Economist: Economics A to Z
  • Independent evaluation

    • IN EVALUATING

      An evaluation carried out by entities and persons free of the control of those responsible for the design and implementation of the intervention. The credibility of an evaluation depends in part on how independently it has been carried out. Independence implies freedom from political influence and organizational pressure. It is characterized by full access to information and by full autonomy in carrying out investigations and reporting findings.

    Commentary

    The rationale for independence is to provide for, and to protect, the impartiality of evaluations and to ensure that the ability of the evaluators to provide credible reports and advice is not compromised. The independence of an evaluation function requires: (i) structural independence: the evaluation is sufficiently removed from political pressures to report findings without fear of repercussions; (ii) behavioral Independence: evaluators are able and willing to issue strong, high quality, and uncompromising reports; (iii) protection from outside interference: the evaluation is not subject to overruling or external influence; and (iv) avoidance of conflicts of interest: there are no official, professional, personal or financial relationships that might cause evaluators to limit the extent of an inquiry, limit disclosure, or weaken or slant findings.

  • Indicator(s)

    • IN EVALUATING

      Quantitative or qualitative factor or variable that provides a simple and reliable means to measure achievement, to reflect the changes connected to an intervention, or to help assess the performance of an actor.

    • IN BUSINESS

      Measurable variable used as a representation of an associated (but non-measured or non-measurable) factor or quantity.

    • IN FINANCE

      Indicators are statistics used to measure current conditions as well as to forecast financial or economic trends. Technical indicators are used extensively in technical analysis to predict changes in stock trends or price patterns in any traded asset.

    • IN ECONOMICS

      A statistic used for judging the health of an economy, such as GDP per head, the rate of unemployment or the rate of inflation.

    Practice & Source: (1) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management (2) Business/CSR: BusinessDictionary.com (3) Finance / impact investing: Investopedia (4) Economics: The Economist: Economics A to Z
    Commentary

    In evaluation, an indicator is a variable that allows verification of changes in the intervention or shows results relative to what was planned. In business, it is a measure of how effectively a company is achieving its objectives. In economics, it is a piece of data used to judge the health of an economy. In finance, it is a tool used to predict market changes. The Better Evaluation website notes that “The terms “measure”, “metric” and indicator” are often used interchangeably and their definitions vary across different documents and organizations. Hence, it is always useful to check what these terms mean in specific contexts.” In an engineering context “indicator” refers to an instrument, not the measure.

  • Information

    • IN GENERAL

      Facts provided or learned about something or someone.

    Practice & Source: (1) Generic: Oxford Living Dictionaries
  • Input(s)

    • IN EVALUATING

      The financial, human, and material resources used for the intervention.

    • IN GENERAL

      What is put in, taken in, or operated on by any process or system.

    Commentary

    Frequently used in discussion of an intervention’s logic model or theory of change to refer to resources used to implement it. This is a specific version of the generic definition.

  • Institutional development

    • IN SUSTAINABLE DEVELOPMENT

      The creation or reinforcement of a network of organizations to effectively generate, allocate and use human, material and financial resources to attain specific objectives on a sustainable basis.

    Commentary

    “Institutional development” refers to trying to strengthen institutions, particularly in developing countries, to ensure sustainable development, rather than or instead of running projects and programs. Related terms include institutional strengthening, institutional capacity building, and organizational development.

  • Institutional investor

    • IN FINANCE

      A nonbank person or organization that trades securities in large enough share quantities or dollar amounts that it qualifies for preferential treatment and lower commissions. Institutional investors face fewer protective regulations because it is assumed they are more knowledgeable and better able to protect themselves. Examples of institutional investors include pension funds and life insurance companies.

    Practice & Source: (1) Finance/Impact investing: Investopedia
  • Integrated reporting (IR)

    • IN BUSINESS

      Integrated reporting aims to provide a detailed picture of a company’s ability to produce value over time for different stakeholders

    • IN BUSINESS

      IR is a process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation.

      An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.

    Practice & Source: (1) Business/CSR: Financial Times Lexicon (2) Business/CSR: The International Integrated Reporting Council
    Commentary

    Integrated Reporting is particularly promoted by the International Integrated Reporting Council (IIRC), a global coalition of regulators, investors, companies, standard setters, the accounting profession, and NGOs. The IIRC has developed the International Integrated Reporting Framework that aims to, among other goals, “enhance accountability and stewardship for the broad base of capitals (financial, manufactured, intellectual, human, social and relationship, and natural) and promote understanding of their interdependencies.”

  • Intention(s)

    • IN GENERAL

      The action of straining or directing the mind or attention to something; mental application or effort; attention, intent observation or regard; endeavor.

    Practice & Source: (1) Generic: Oxford Living Dictionaries
  • Interest

    • IN FINANCE

      What it costs to borrow money and what is earned from lending it or putting it on deposit. Interest is normally expressed in annual terms and as a percentage of the amount borrowed, lent or deposited (the interest rate). The term interest also means a share of ownership.

    • IN GENERAL

      a) The feeling of wanting to know or learn about something or someone. b) Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. c) The advantage or benefit of a person or group. d) A stake or involvement in an undertaking, especially a financial one. e) (usually interests) A group or organization having a common concern, especially in politics or business.

    Practice & Source: (1) Finance/Impact investing: Financial Times Lexicon (2) Generic: Oxford Living Dictionaries
  • Intermediary

    • IN FINANCE

      An entity that acts as the middleman between two parties in a financial transaction, such as a commercial bank, investment banks, mutual funds and pension funds. Financial intermediaries offer a number of benefits to the average consumer, including safety, liquidity, and economies of scale involved in commercial banking, investment banking and asset management

    Practice & Source: (1) Finance/Impact investing: Investopedia
  • Internal evaluation

    • IN EVALUATING

      Evaluation of an intervention conducted by a unit and/or individuals reporting to the management of the donor, partner, or implementing organization.

  • Internal validity

    • IN EVALUATING

      The degree to which conclusions about causal linkages are appropriately supported by the evidence collected.

    Practice & Source: (1) Evaluation: USAID Glossary of Evaluation Terms
  • International Integrated Reporting Council (IIRC)

    • IN BUSINESS

      The International Integrated Reporting Council (IIRC) – which describes itself as a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs – seeks to raise awareness and encourage companies to include non-financial information in their regular reports. The IIRC aims to improve the quality of information available to investors to enable a more efficient and productive allocation of capital. It aims to ensure that there is more communication of risk factors which could affect a company’s value over time. It aims to enhance accountability and promote good stewardship.

    Practice & Source: (1) Business/CSR: Financial Times Lexicon
    Commentary

    See “Integrated reporting”.

  • Interpretation

    • THE GENERAL

      The action of explaining the meaning of something.

    Practice & Source: (1) Generic: Oxford Living Dictionaries
  • Intervention

    • IN EVALUATING

      An action or entity that is introduced into a system to achieve some result. In the program evaluation context, an intervention refers to an activity, project or program that is introduced or changed (amended, expanded, etc.).

    Practice & Source: (1) Evaluation: USAID Glossary of Evaluation Terms
  • Investee

    • IN FINANCE

      A company or entity in which an investor makes a direct investment. More commonly used in the venture capital vernacular to describe a company in which a controlling interest is held by a venture capitalist firm.

    Practice & Source: (1) Finance/Impact investing: Investorwords.com
    Commentary

    Investments made to an investee could be in the form of either a loan, an equity investment, or a hybrid of the two. Philanthropic actors may view grants as “investments” as well, and grant recipients as “investees”, however this can be confusing to investors who would not see a grant (that does not need to be repaid) as an investment.

  • Investment

    • IN FINANCE

      The use of money to make more money. There are two kinds of investment: direct investment that involves putting one’s capital into specific fixed assets such as property, factories, buildings, etc.; indirect investment that involves investing in securities or other assets that are traded on financial markets.

    Practice & Source: (1) Finance/Impact investing: Financial Times Lexicon
    Commentary

    For indirect investments, investors can place money in different types of investments (asset classes) where the investor typically trades-off different levels of return for different levels of risk. For some investors (i.e., impact investors) lower financial returns might also be acceptable if the creation of social returns can be demonstrated.

  • Investment thesis

    • IN FINANCE

      The beliefs that investors decide to use when determining what investments to purchase or sell, when to take an action and why. An investment thesis helps investors establish goals for their investments, and measures whether they have been achieved, either in written form or simply as an idea. A sound investment thesis can be a foundation for a profitable portfolio. On the other hand, an incorrect investment thesis can result in sub-par returns or losses.

    Practice & Source: (1) Finance/Impact investing: Investopedia
  • Investor

    • IN FINANCE

      Any person or organization who commits capital with the expectation of financial returns. Investors utilize investments in order to grow their money and/or provide an income during retirement (for individuals), such as with an annuity. Investors typically perform technical and/or fundamental analysis to determine favorable investment opportunities, and generally prefer to minimize risk while maximizing returns

    Practice & Source: (1) Finance/Impact investing: Investopedia
    Commentary

    As well as seeking to minimize risk while maximizing financial returns, investors may choose to pursue investment opportunities that provide social and environmental returns.