As explored in the research into the context, the organisation’s activities, and the impact that follows, take place within a complex set of relationships and circumstances outside of the organisation’s direct control. The intervention may touch one part or aspect of a beneficiary’s life, but for the impact chain to work, and for the links between activities, outputs, and outcomes all to hold, it will inevitably rely upon certain conditions for change: things that need to be in place for the change to occur, and things that contribute to the change alongside or outside of whatever the organisation is doing. These things are implicitly assumed within the impact chain, but must be made explicit within the greater impact plan. They are often referred to as assumptions.
Assumptions are the other factors that go into the progression from outputs to outcomes, and need to be included to give a genuine picture of how change happens in the lives and environments of beneficiaries. For each proposed outcome, it is useful to ask what else needs to be true for that outcome to happen. Other factors may include conditions that were pre-existing, or triggers for change that get activated as part of the process.
Assumptions may relate to:
- the surrounding context
The outcome may rely on external factors. For example, an organisation running an employment training programme that targets the outcome “beneficiaries find jobs” may assume that there will be jobs available in the local area.
The outcome may rely on additional support from the beneficiary’s relationships with others (e.g. family members, social-workers, other professionals). For example, an organisation providing housing for people with disabilities, that targets the outcome “people with disabilities enjoy freer lives through moving into independent accommodation”, may assume that beneficiaries have access to a certain level of additional home help and support. Consideration of such assumptions may indicate how beneficiaries could be excluded if they don’t have access to the assumed relationships, and where the organisation might be able to work with others.
- the beneficiary
The outcome may assume certain things about the beneficiary, and how they will respond to the intervention. For example, an organisation running a sports programme for disadvantaged young people, that targets the outcome “young people achieve better attendance and behaviour at school”, may assume that through an engagement with sport, young people will be able to learn teamwork skills, come to value leadership and discipline, gain positive role models, etc., and thereby be inspired to change their goals and behaviour (if the sports programme is not expected to do this alone then, naturally, what are the other factors the programme assumes will be in place to supplement it?). Often assumptions about how a beneficiary will respond to the intervention are at the absolute core of the organisation’s approach, and for this reason, it is essential such assumptions are laid out clearly, and checked for validity and potential holes.
Once identified, assumptions may present various risks:
- risk of other factors fluctuating or failing
If the links within the impact chain assume the presence of other factors, it follows that their absence could threaten the chain, and thereby the generation of impact. It is important therefore to review these factors for the risk of them fluctuating or failing (especially when the factors are well beyond the organisation’s control); and the effect this would have upon the organisation and the results of its activities were it to happen.
- risk of assumptions being wrong
The assumptions present a further risk of simply being wrong — that the beneficiaries will not respond in the anticipated way, or that other factors, though present, will not have the anticipated effect. Once the assumptions have been identified and set down, it is possible to review them for credibility.
- risk of the intervention being non-significant
In relation to the other factors that contribute to the change, it is useful to review how significant the intervention of the organisation (typically the delivery of a product or service, as tracked by the outputs) really is. The understanding of this significance contributes to the assessment of the context of change, and subsequent adjustments.
Assumptions may be substantiated by evidence — for example the organisation’s own experience and track record, or the track records of other organisations producing similar outputs. Alternatively there may be research in the field from third parties investigating how this kind of change occurs, and how the surrounding conditions play into each other.
The availability of evidence will depend somewhat upon the organisation’s own stage of development (and so whether or not it has a track record), and the originality of its approach. The more innovative its activities, impact chain, and theory of change, the more untested and less well-evidenced the implicit assumptions will necessarily be. However in the absence of direct precedents for what the organisation is proposing to do, there may still be related evidence and arguments that can be used to make the case that the assumptions are reasonable.
The desired balance between evidence and theory, and between established practice and new ideas, will depend on the organisation and the investor’s mission and strategy. The question feeds into the assessment of impact risk, and the role it plays in the investment decision.