Insights

Think Impact globally pioneered impact-led design as an approach around a decade ago. The aim was to fuse best practice from impact measurement with co-design. Initially focused on supporting not-for-profit organisations to develop impact-led strategies, new fundraising approaches or redesign service provision, the approach has evolved significantly. In the run up to presenting at the recent Social Impact Summit, we reflected this evolution in impact-led design. Here we outline our thinking on impact-led design 2.0. It is an approach that can be used by business, government, philanthropy and the not-for-profit sectors to drive social change.

Trends

When you have worked in measuring social impact for as long as us, you start to notice some trends. Often, we are asked to evaluate a program, only to find that the program was designed around the available funding streams – we call this funding-led design. We have also regularly noticed that activities aren’t designed adequately to reach the intended beneficiaries. Alternatively, these beneficiaries have not been engaged fully in the design process (i.e. there is not a commitment to genuine co-design).

We also commonly find that programs are not based on an understanding of the existing evidence of what works (i.e. they are not evidenced based). All of these things may inhibit the ability of a program to have the intended impact.

Initial development

To assist organisations to manage for better impact, we developed our impact-led design approach over 2015 to 2018. As far as we are aware it was a global first in fusing best practice from impact measurement with emerging good practice from codesign. We also partnered with the Centre for Evidence and Implementation (CEI) in 2018 on an evaluation which further shaped our thinking.

The impact-led design approach starts with the intended impact in mind, draws on the existing evidence base of what works and involves key stakeholders in co-designing the solutions. As indicated, the approach was influenced by good practice in a range of different disciplines including:

• Human-centred design – An approach to problem-solving that puts the needs, experiences and ideas of people at the heart of designing solutions.
• Community development – A process that strengthens communities by building local capacity, relationships and leadership to create lasting change.
• Impact measurement – The practice of tracking and assessing the outcomes and effectiveness of programs to understand what works and why.
• Evidence-based practice/implementation science – Using the best-available research and data to guide decisions and applying proven methods to implement and scale solutions effectively.
• Collaborative commissioning – A way of designing and funding services that brings together funders, providers and communities to co-create solutions that deliver better outcomes.

This fusion of these approaches created the foundations for impact-led design.

Collaborative ethos

The process draws in funders, partners, the community, academics, policy makers and other key stakeholders to design new solutions or redesign existing solutions with them. Our codesign experience led us to start the process with a ‘blank sheet’ where we wanted to have an approach that was open to all possible solutions and sought to hear the ‘voice’ of those with lived experience. But out impact measurement expertise and focus on evidence-based practice anchored us around co-designing with consideration of the evidence of what works and conversations about the intended impact.

Foundation

The foundation of any impact-led design approach is ensuring that there is a clear, understood and shared theory of change. We have explored the development in our thinking about theory of change in previous insight articles on Rethinking theory of change, Managing for better impact and From measuring impact to continuous improvement: 12 key lessons.

Our revised theory of change approach is illustrated below, where we support people to move through a seven-stage development process to create their theory of change ‘product’ but more importantly an implementation plan (which can be embedded into an organisation’s strategy).

The most significant shifts in our thinking around theory of change which also flowed into how we used impact-led design were:

Understanding the context

Context matters when developing a theory of change because every situation is different. The people involved, the local community, the history, the local service providers and the systems already in place all affect what kinds of change are possible and how that change can happen. If there is no understanding of context then a theory of change can miss the mark, using strategies or mechanisms that don’t work. By taking the time to understand the specific context, you can make sure your plan for change is realistic, meaningful and more likely to succeed.

Clarifying intended impact early in the process

Being clear about the intended impact at the start of a theory of change process is critical because it sets the direction for everything that follows. It ensures everyone is working toward the same goal and helps avoid confusion or misunderstanding. Clarity on intended impact acts as a guiding anchor. Without clarity on the end goal, it’s easy to get caught up in activities that feel useful but don’t actually contribute to lasting change. Clarity in intended impact also shifts the focus from the funding available towards what people want to see achieved. Starting with a clear, shared vision of impact helps keep effort aligned, meaningful and accountable.

Mechanism

Understanding how change happens (the mechanism) is a vital part of a good theory of change. It’s not just about what activities you do, but how you do them, how much of the activity is needed, and why these activities are expected to work for the people involved. Thinking this through helps you move beyond assumptions and get clear about what will actually make a difference. By drawing on both real-world experience and evidence, programs can be designed that are more thoughtful, better targeted and more likely to create the intended impact you’re aiming for.

Contexts to use

Over the past decade we’ve used impact-led design approaches at different levels – this has included supporting Launch Housing to reshape their theory of change and evolve their Advance to Zero initiative, Equity Trustees to take an impact-led approach to effective philanthropy and Major Roads Projects Victoria to evolve their roadmap for social procurement capability building. Whilst the major focus of our work has been on co-designing initiatives, impact-led design can also be used to develop organisations to become more impact-led. It can also be used in place-based approaches where partners are aiming to achieve step change. These contexts require the approach to be adaptive.

Initiatives

Impact-led design provides a structured approach to redesigning services, programs and initiatives to sharpen their focus on long-term change. The focus is around ensuring that activities directly contribute to the intended impact. Whether developing a new initiative or reshaping an existing service, the approach ensures the initiative is are grounded in lived experience, aligned to outcomes and adaptable to real-world complexity.

Organisations

At the organisational level, the approach helps align mission, strategy and operations around a clear theory of change. It supports leadership teams to clarify purpose, reshape strategies, strengthen fundraising/investment approaches and identify new partnership opportunities. By embedding outcomes thinking into governance, culture and day-to-day practice, organisations can focus their efforts more strategically, improve accountability for results and build a shared understanding of how change happens across teams.

Place-based

In place-based contexts, the approach supports communities, government and service systems to collaborate around a shared vision of intended impact. It provides a common language and framework for aligning diverse efforts, mapping systemic drivers of change, and sequencing actions over time. By centering local voices and fostering genuine partnership across sectors, the approach enables both coordinated and adaptive responses to complex social challenges such as unemployment, intergenerational disadvantage, homelessness, etc. This partnering mindset helps build trust, unlock shared resources and strengthen the collective capacity for long-term impact.

Evolution in thinking – impact-led design 2.0

In preparing to present on impact-led design at the Social Impact Summit we reflected on our learning from using the approach. What has emerged is impact-led design 2.0.

The key additions to the approach are:

• a set of core principles that guide the approach
• an increased understanding of the importance of partnership in achieving social change
• the evolved understanding of the role of the learning partner in facilitating change.

Underpinning principles – impact-led design 2.0

One of the first reflections was that the approach is guided by a set of core principles:

• Outcomes first – Focus on the long-term impact for individuals, communities or systems, such as improved wellbeing, equity or quality of life.
• Lived experience and co-design – Engage people with lived experience and frontline workers from the outset to ensure services are meaningful and effective.
• Systems thinking – Recognise the broader ecosystem influencing outcomes and design across boundaries, not just within organisational silos.
• Data and evidence-informed – Use data, research and evaluation insights to understand root causes.
• Iterative and adaptive – Test, learn and adapt through prototyping and feedback loops rather than relying on fixed solutions.

As indicated, the approach is adaptive, involving a suite of skills and tools. There are a set of key steps in the process:

• Define the impact – What is the change we want to see? Frame it in terms of intended impact.
• Understand the evidence of what works – Build understanding, based on evidence of what works, across the collaboration partners.
• Map the system – Understand the current service landscape, pain points, enablers and unintended consequences.
• Engage and co-design – Work with users and stakeholders to generate and test ideas collaboratively.
• Develop prototypes and test – Pilot new service concepts, learn from real-world feedback and refine.
• Implement and scale – Embed what works into policy, practice and culture.
• Measure impact – Use shared outcome metrics to track progress over time that go beyond outputs or satisfaction.

Partnership working – impact-led design 2.0

One of the key evolutions has been the growing recognition that partnerships are not just helpful, but essential for driving sustained social change. Complex challenges such as entrenched unemployment, educational inequity or disability exclusion cannot be addressed by a single actor or sector alone. These are acknowledged ‘wicked problems’, they are shaped by dynamic systems, structural barriers and diverse stakeholder interests. To tackle them demands collective responses grounded in shared purpose. In this context, partnering is no longer a tactical choice but a strategic imperative.

There is growing evidence that shows collaborative, cross-sector approaches outperform siloed interventions, particularly when the goal is long-term, enduring change. Initiatives like collective impact and place-based collaborations have demonstrated that when community members, service providers, government agencies and funders align around a common agenda, results improve. It is important that partners co-design and co-own both strategy and delivery.

Impact-led design offers a practical framework for enabling and strengthening these kinds of partnerships or collaborative commissioning approaches. Rather than a top-down or rigid approach, impact-led design supports adaptive strategy-making, helping partners navigate ambiguity, test solutions and iterate over time. It embeds co-design as a method for inclusive engagement, ensuring community voices are not tokenised but embedded in both decision-making and governance. And it links outcomes to measurement and learning systems that build trust, promote accountability and support replication of what works.

At its best, impact-led design builds effective partnership, helping organisations see themselves not as isolated actors but as part of a broader system with shared accountability for results. It helps broker alignment between funders, service providers, communities and policymakers by focusing on what matters most – outcomes for people. As social change efforts become increasingly networked and interdependent, the ability to design, lead and sustain high-quality partnerships is emerging as one of the most critical success factors. Impact-led design is a powerful tool to support that.

Learning partner – impact-led design 2.0

Our final reflection was on how central the role of the learning partner is for the collaboration.

The learning partner plays a strategic, facilitative and capability-building role in supporting initiatives, organisations or collaborations to embed reflective practice, use evidence effectively and enhance impact. The learning partner is typically embedded in the process and works collaboratively to foster learning and adaptive management. They perform a variety of roles:

Strategic facilitator

• Supports teams to articulate and refine their theory of change and impact framework.
• Helps identify learning priorities, evaluation questions and reflection points.
• Encourages use of evidence for adaptive decision-making and strategy refinement.
• Works with complex, evolving initiatives where outcomes are emergent. Helps track shifts in context, strategy and implementation over time.
• Supports course correction and real-time learning loops.

Critical friend

• Provides honest, constructive feedback on progress, decisions and implementation.
• Challenges assumptions, surfaces blind spots and supports sense-making.
• Builds trust to enable reflective dialogue and continuous improvement.

Evidence broker

• Designs or guides participatory and developmental evaluation approaches.
• Collects, synthesises and interprets qualitative and quantitative data.
• Helps teams understand what’s working, for whom, under what conditions and why.

Capability builder

• Strengthens internal evaluation and learning capabilities of individuals and organisations.
• Provides tools, training or mentoring to embed reflective and evidence-informed practices.
• Promotes a culture of curiosity, experimentation and learning.

Connector and knowledge manager

• Facilitates cross-organisational or cross-sector learning and collaboration.
• Synthesises and shares learning products, case studies or evidence briefs.
• Ensures learning is accessible and used by diverse stakeholders.

In sum, the learning partner is the bridge between insight and action, embedding reflection and evidence into practice, and helping organisations learn their way to greater impact. Their success depends on trust, systems thinking and being deeply attuned to context.

Using the approach

The approach can be used by business, government, philanthropy and the not-for-profits sectors to drive social change. If you want to know more or talk through how to use the impact-led design within your organisation, don’t hesitate to get in touch with us via hello@thinkimpact.com.au.