• Randomized Control Trial (RCT)

    • in Evaluating

      A study in which a number of similar people are randomly assigned to 2 (or more) groups to test a specific drug, treatment or other intervention. One group (the experimental group) has the intervention being tested, the other (the comparison or control group) has an alternative intervention, a dummy intervention (placebo) or no intervention at all. The groups are followed up to see how effective the experimental intervention was. Outcomes are measured at specific times and any difference in response between the groups is assessed statistically. This method is also used to reduce bias.

    Practice & Source: (1) Evaluation: Glossary, National Institute for Health and Care Excellence (NICE)
    COMMENTARY

    Randomized controlled trials (RCTs) are typically regarded as the most rigorous way of determining whether a cause-effect relation exists between an intervention and outcome and for assessing the cost effectiveness of an intervention. Other study designs, including non-randomized controlled trials, can detect associations between an intervention and an outcome. But they cannot rule out the possibility that the association was caused by a third factor linked to both intervention and outcome. Random allocation ensures no systematic differences between intervention groups in factors, known and unknown, will affect the outcome. However, there is often disagreement among experts as to when RCTs are the most appropriate form of evaluation and identifying causality.

  • Randomized evaluation

    • in Evaluating

      See definition for “Randomized Controlled Trial.”

    Practice & Source: None
  • Recoverable grant

    • in Finance

      Essentially a convertible note, with no time expiration and no liquidation payback rights, where the conversion occurs only at valuations greater than a given threshold. It’s designed specifically for very early-stage investment, where entrepreneurs need risk tolerant and inexpensive capital.

    • in Philanthropy

      No clear, authoritative definition currently exists. See commentary.

    Practice & Source: (1) Finance/Impact investing: Introducing Recoverable Grants, Echoing Green
    COMMENTARY

    In the field of philanthropy, recoverable grants (also known as forgivable loans) are a unique type of grant where a philanthropist or non-profit organization decides to lend out money on the hope that an entrepreneur will be successful. If an entrepreneur is not successful, they don’t have to pay anything back, regardless of how much they originally borrowed.

    Two types of options are available with recoverable grants: “put options” or “call options.” With the put option, a grant maker is given payment when the entrepreneur achieves a particular milestone. The call option works in an opposite manner. Basically, the grantee has a financial obligation to the loan until they achieve a certain milestone.

  • Relevance (Noun)

    • in Evaluating

      The extent to which the objectives of an intervention are consistent with beneficiaries’ requirements, country needs, global priorities and partners’ and donors’ policies. Retrospectively, the question of relevance often becomes a question as to whether the objectives of an intervention or its design are still appropriate given changed circumstances.

    • in General

      the quality or state of being closely connected or appropriate.

    Practice & Source: (1) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management (2) Generic: Oxford Living Dictionaries
    COMMENTARY

    While the concepts are different, “relevance” is sometimes used synonymously with “materiality”, in that something that is not material may not seem relevant. In accounting, materiality is the application of the principle of relevance for a specific entity. In evaluation, relevance is the extent to which the objectives of an intervention are consistent with beneficiaries’ requirements, country needs, global priorities and agreed policies. In conventional business (see entry for Relevant), the term characterizes corporate data that according to an accountant or an auditor is useful and could make a difference to decision making.

  • Relevant (Adjective)

    • in General

      Closely connected or appropriate to what is being done or considered.

    • in Business

      a) Accounting: Benefit or cost actually caused by, or expected to follow, a financial event or transaction.
      b) Law: Evidence or fact logically connected to or helpful in proving a material point.

    • in Accounting

      Relevant financial information is capable of making a difference in the decisions made by users. Financial information is capable of making a difference in decisions if it has predictive value, confirmatory value, or both.

    Practice & Source: (1) Generic: Oxford Living Dictionaries (2) Business/CSR: BusinessDictionary.com (3) Accounting: The Conceptual Framework for Financial Reporting 2010, International Financial Accounting Standards Board
    COMMENTARY

    See entry for “relevance”.

  • Reliability

    • in General

      a) The quality of being trustworthy or of performing consistently well. b) The degree to which the result of a measurement, calculation, or specification can be depended on to be accurate.

    • in Evaluating

      Consistency or dependability of data and evaluation judgments, with reference to the quality of the instruments, procedures and analyses used to collect and interpret evaluation data. Evaluation information is reliable when repeated observations using similar instruments under similar conditions produce similar results.

    Practice & Source: (1) Generic: Oxford Living Dictionaries (2) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management
  • Replicability

    • in Business

      Property of an activity, process, or test result that allows it to be duplicated at another location or time.

    Practice & Source: (1) Business/CSR: BusinessDictionary.com
  • Reporting standard

    • No clear, authoritative definition. See commentary.

    Practice & Source: None
    COMMENTARY

    Reporting standards are principles and practices that are widely accepted and used in financial and non-financial reporting. They also set out the format and content of disclosure. Reporting standards facilitate comprehension and comparison of reports by users and support the efficient production of reports. A reporting standard is different from a measurement standard that sets out how an item is to be measured or valued though many standards are a mix of both. Accounting reporting standards set out how a firm should prepare and present its business income, expenses, assets and liabilities. International Financial Reporting Standards, usually called IFRS Standards, are standards issued by the IFRS Foundation and the International Accounting Standards Board.

  • Responsible investment

    • in Finance

      Responsible investment is an investment strategy which seeks to generate both financial and sustainable value. It consists of a set of investment approaches that integrate environmental, social and governance (ESG) and ethical issues into financial analysis and decision-making. Responsible investment goes by many names – it is variously referred to as socially responsible investing (SRI), ethical investing, sustainable investing, triple-bottom-line investing, green investing – but underlying these differing names is a common theme focused on long-term value creation. Value in this context refers not only to economic value, but to the broader values of fairness, justice, and environmental sustainability.

    Practice & Source: (1) Finance/Impact investing: Financial Times Lexicon
  • Result(s)

    • in General

      a) A thing that is caused or produced by something else; a consequence or outcome. b) A favorable outcome of an undertaking or contest. c) (usually results) The outcome of a business’s trading over a given period, expressed as a statement of profit or loss. d) An item of information obtained by experiment or some other scientific method; a quantity or formula obtained by calculation.

    • in Evaluating

      The output, outcome or impact (intended or unintended, positive and/or negative) of an intervention.

    Practice & Source: (1) Generic: Oxford Living Dictionaries (2) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management
  • Results chain

    • in Evaluating

      The causal sequence for a development intervention that stipulates the necessary sequence to achieve desired objectives- beginning with inputs, moving through activities and outputs, and culminating in outcomes, impacts, and feedback. In some agencies, reach is part of the results chain.

    Practice & Source: (1) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management
  • Results framework

    • in Evaluating

      The logic that explains how the objective of the program is to be achieved, including causal relationships and underlying assumptions.

    Practice & Source: (1) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management
  • Results-Based Management (RBM)

    • in Evaluating

      A management strategy focusing on performance and achievement of outputs, outcomes and impacts.

    Practice & Source: (1) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management
  • Retrospective

    • in General

      Looking back on or dealing with past events or situations.

    Practice & Source: (1) Generic: Oxford Living Dictionaries
  • Return on Investment (ROI)

    • in Finance

      A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ROI measures the amount of return on an investment relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio.

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

    • IN Business

      An economic theory of consumption behavior which asserts that the best way to measure consumer preferences is to observe their purchasing behavior. Revealed preference theory works on the assumption that consumers have considered a set of alternatives before making a purchasing decision. Thus, given that a consumer chooses one option out of the set, this option must be the preferred option.

    • in Economics

      The inference of willingness to pay for something which is non-marketed by examining consumer behavior in a similar or related market.

    Practice & Source: (1) Business/CSR: Investopedia (2) Economics: HM Treasury Green Book: Appraisal and Evaluation in Central Government.
    COMMENTARY

    Revealed preference is one technique that can be used to value goods and services where there is not an efficient market to estimate value.

  • Review (Noun)

    • in General

      a) A formal assessment of something with the intention of instituting change if necessary. b) A reconsideration of a judgment, sentence, etc. by a higher court or authority. c) A report on or evaluation of a subject or past events. d) A critical appraisal of a book, play, film, etc. published in a newspaper or magazine.

    • in Evaluating

      An assessment of the performance of an intervention, periodically or on an ad hoc basis. Frequently “evaluation” is used for a more comprehensive and/or more in- depth assessment than “review”. Reviews tend to emphasize operational aspects. Sometimes the terms “review” and “evaluation” are used as synonyms.

    Practice & Source: (1) Generic: Oxford Living Dictionaries (2) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management
    COMMENTARY

    The different definitions of “review” could potentially lead to misunderstanding. In addition, “review” could also be confused with literature reviews or systematic reviews that are specific research and evaluation methods. Though slightly different from each other, they share the same purpose of summing up the best available research on a specific question and using transparent procedures to synthesize the results of relevant studies.

  • Review (Verb)

    • in General

      a) Assess (something) formally with the intention of instituting change if necessary. b) Submit (a sentence, case, etc.) for reconsideration by a higher court or authority. c) Survey or evaluate (a subject or past events). d) Write a critical appraisal of (a book, play, film, etc.) for publication in a newspaper or magazine.

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

    • in General

      A situation involving exposure to danger.

    • in Finance

      The chance an investment’s actual return will differ from the expected return. Risk includes the possibility of losing some or all of the original investment. Different versions of risk are usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment.

    • in Finance

      The measurable uncertainty that an investment (or the running of a business) will not generate the expected returns (or earnings). The basic risk/return concept assumes a trade-off between the two – the more risk one takes, the higher the investment gains one should expect, and vice-versa. That is because most investors are risk-averse – faced with two investments that offer the same returns, they will choose the one that carries less risk. Some investors are risk-neutral – they seek to maximize returns and do not care about the amount of risk involved; and a few could theoretically be risk-seeking – faced with two investments with the same expected returns, they will choose the riskiest. There are many different kinds of risk, relating not only to financial investments but also to operational concerns and the impact on earnings. These include exchange risk, political risk, regulatory risk, systematic risk (involving a whole market), non-systematic risk (involving a specific stock), etc.

    Practice & Source: (1) Generic: Oxford Living Dictionaries (2) Finance / impact investing: Investopedia (3) Finance / impact investing: Financial Times Lexicon
    COMMENTARY

    The generic definition of risk used outside of the finance and business sectors only includes the potential for harm (downside risk). However, the concept of financial risk of investments or businesses includes the potential for better than expected returns (upside risk). Thus in finance and business risks are not necessarily to be avoided, but to be managed based on risk preferences (risk averse, risk neutral, or risk seeking) and a comparison between the level of return expected and the level of risk taken on. Different business sectors have variations and definitions of risk. For example, in the insurance sector that is built around risk management, risk is measurable, not simply an uncertainty.

  • Risk analysis

    • in Finance

      The study of the underlying uncertainty of a given course of action. Risk analysis refers to the uncertainty of forecasted future cash flows streams, variance of portfolio/stock returns, statistical analysis to determine the probability of a project’s success or failure, and possible future economic states. Risk analysts often work in tandem with forecasting professionals to minimize future negative unforeseen effects.

    • in Business

      As a component of risk management, it consists of (1) Identification of possible negative external and internal conditions, events, or situations, (2) Determination of cause-and-effect (causal) relationships between probable happenings, their magnitude, and likely outcomes, (3) Evaluation of various outcomes under different assumptions, and under different probabilities that each outcome will take place, (4) Application of qualitative and quantitative techniques to reduce uncertainty of the outcomes and associated costs, liabilities, or losses.

    • in Evaluating

      An analysis or an assessment of factors (called assumptions in the logframe) affect or are likely to affect the successful achievement of an intervention’s objectives. A detailed examination of the potential unwanted and negative consequences to human life, health, property, or the environment posed by development interventions; a systematic process to provide information regarding such undesirable consequences; the process of quantification of the probabilities and expected impacts for identified risks.

    Practice & Source: (1) Finance/Impact investing: Investopedia (2) Business/CSR: BusinessDictionary.com (3) Evaluation: DAC/OECD Glossary of Key Terms in Evaluation and Results Based Management
    COMMENTARY

    The definition of risk analysis (i.e., what it involves) depends on whether the risks relate to investment returns or to risks to a business or venture.

  • Risk capital

    • in Finance
      • Investment funds allocated to speculative activity and refers to the funds used for high-risk, high-reward investments such as junior mining or emerging biotechnology stocks. Such capital can either earn spectacular returns over a period of time, or it may dwindle to a fraction of the initial amount invested if several ventures prove unsuccessful, so diversification is key for successful investment of risk capital. In the context of venture capital, risk capital may also refer to funds invested in a promising startup.
    • in Finance

      Equity capital of a firm against which all losses are charged and which takes the full brunt of the effects of failures, misjudgments, uncertainties, and adverse circumstances.

    Practice & Source: (1) Finance/Impact investing: Investopedia (2) Finance / impact investing: BusinessDictionary.com