Using impact logics

Impact logics show when investments can change lives

Keeping the focus on impact is probably the most important discipline in development project management. It is so tempting to support projects simply because the applicant looks like they can deliver the project successfully or the business idea itself looks good. But while we want convincing partners with good projects, we have to explain time and again to our applicants that we also want a "plus". We also want to see some tangible change experienced by poor people.

It is this impact on our target beneficiaries that justifies using UK tax payers' money to support private sector investment in Afghanistan. This is what makes the difference between a project that is fundable and one that (however good in itself) we will reject. The investment project is a means to an end, not an end in itself.

The tool that we have used for guiding our evaluation of concept notes and for internal training purposes is the impact logic. Impact logics are simply a way of tracing a path from the ABIF intervention to the effect that we want the intervention to create. We haven't done anything particularly complex or time consuming (and certainly no attempts to quantify impact!), but rather we have used the impact logic in its simplest format to test whether a given investment project has the potential to create market change that in turn will lead to a real benefit for a significant number of poor people in Afghanistan.

There is no doubt that the evaluation process has been enhanced by the integration of impact logics into the concept note stage. And at the same time it has helped in terms of developing our internal capacity. I have been really impressed by the way that the team has understood and adopted this way of thinking so quickly. It makes sense to them, so they can communicate more effectively with applicants and in the end we receive better applications.

The end result in this round is that we have now finalised our shortlist with 14 projects (so I was just a little bit optimistic thinking we would have 15), and thanks to the use of impact logics the selection rationale of each would stand up to poverty reduction scrutiny. Whether they survive the next stage of the detailed business plan and financing negotiations is a different matter, but there is no question that every project on our shortlist could (if implemented in the way described in the concept note) contribute to our strategic objective.

So I would argue strongly in favour of the use of simple and graphical impact logics. There is no better tool that I have found so far for checking out whether you can justify the use of tax payers' money in any given development project.

Oh, but please forget the ridiculous calculations and the complex spreadsheets giving "results" such as the USD4.26 net monthly income increase impact that you will have on 15,287 beneficiaries. It's a complete waste of time and the results are a heap of nonsense, whatever anyone might tell you!