Value for Money - my worldview

It's never just about the money

Welcome! Thanks for subscribing! This post outlines an inter-disciplinary system for answering value for money questions. This week, the what. Next week, the how...

Value for Money: an important question; sometimes tricky to answer. Some say VfM assessment is too donor/funder-centric and neglects important perspectives like communities who are meant to benefit from an intervention. Some say it's too accountability-focused and misses opportunities to inform learning and improvement. Some say it's too simplistic and ignores complexities of real-world programs. Some say it leaves them feeling underwhelmed because it doesn't capture the full value of their investment.

I say we can address all of these problems - and we must, because VfM is critically important to making good decisions with limited resources, contributing to positive social, cultural, environmental, and economic impacts.

I'm on a mission to disrupt VfM assessment, so it feels appropriate to start by setting out my worldview on evaluation and VfM.

Value for money is never just about the money - it's about good use of resources to create value. What constitutes 'good resource use' is going to be a matter of context and perspective.

There’s more to value for money than economic analysis alone. It’s sometimes important to use methods like cost-benefit analysis (CBA) to estimate whether (or under what conditions) a policy or program makes society better off in the aggregate, but economic efficiency isn’t always the full value story. And CBA isn’t always necessary, feasible, or desirable.

For example, the value propositions of some interventions are centred on addressing inequities, power imbalances, injustices, or perspectives that are in tension and can’t be reconciled by a formula. Good resource use is as much about equity, fairness, human dignity and rights as efficiency. Also, some things that people value like hope, love, reciprocity, cultural and environmental sustainability are intangible - a stretch to value monetarily.

What to do? We already have the evaluation methods and tools. We need a system to align our methods and tools to the purpose of answering VfM questions. I advocate the following principles for a VfM evaluation system:

• Interdisciplinary - combining theory and practice from evaluation (systematically determining value) and economics (the study of how people choose to use resources)

• Evaluative reasoning - using contextually determined criteria and standards to make judgements from evidence

• Mixed methods - combining multiple sources of evidence (qualitative and quantitative) to understand the story behind the numbers

• Participatory - engaging those with a right to a voice in co-design, fact-finding and sense-making because ‘value’ is just an abstract concept until we address the question of ‘value to whom’.

One way to enact these principles is the Value for Investment system. I developed this system with a view to promoting better VfM assessment: more valid and credible, more value-focused, more inclusive - and ultimately, more useful.

Value for Investment is an inter-disciplinary system for answering value for money questions. It combines evaluative and economic thinking. It's rigorous, intuitive to learn, practical to use - and it’s open-access.

Rubrics are the backbone of the Value for Investment system. Rubrics transform evaluation practice, supporting clear reasoning at every step of the process. Developing rubrics brings stakeholders to the table to co-define what matters (criteria) and what good looks like (standards). Rubrics delineate the scope of the evaluation and help to clarify what evidence needs to be collected. They provide a framework for organising the evidence so it's efficient to analyse. They provide a shared and agreed set of lenses for making sense of the evidence and for making evaluative judgements. They provide a structure for reporting findings, based on the aspects that matter.

Value for Investment uses rubrics as a way to bring together multiple values (e.g. social, cultural, environmental, and economic) so that you can make evaluative judgements from robust mixed methods evidence (qualitative and quantitative). It uses participatory processes to engage stakeholders in evaluation co-design, fact-finding and sense-making.

Join us in disrupting VfM assessment! Value for Investment is used by consulting firms, government agencies and NGOs. It's applied at a range of scales from one-off evaluations to whole-organisation performance frameworks. It’s been adapted for development programs in collaboration with Oxford Policy Management (OPM). It's won awards recognising its innovative approach and widespread application. You can use it too.

I'm looking forward to upcoming training workshops with ANZEA, AES and UKES (and more on the horizon), and continued collaborations with colleagues in government agencies and consulting firms as they adopt and scale VFI principles in their evaluation systems and performance frameworks.

Free resources on my website at www.julianking.co.nz/vfi/

Next week: an intuitive step-by-step process you can use to evaluate anything. Let me know in the comments if there are topics you’d like me to discuss in future posts.