Why the finance sector should be banking on theory of changes: A case study of the adoption and utility of leveraging theory of changes for financial institutions.

Abstract Information: As financial institutions seek to make an impact and develop products and services to drive positive change for communities, people, and the environment, more focus is placed on what tools can enhance the financial sector's communication, transparency, and accountability toward internal and external stakeholders about that mission. Particular emphasis has been placed on framework development, financial investment and capital deployment tracking, and external commitment progress reporting. However, the gap remains for how financial institutions can test and monitor if the interventions developed towards these missions lead to specific change in communities and target long-term outcomes. This presentation will summarize the powerful story of how the adoption of the theory of changes answered this gap for U.S. Bancorp Impact Finance, unpack how to tailor a theory of change to investigate the financial, social, and environmental returns, and share lessons learned from the first internal Impact Measurement and Management function of U.S. Bank. Often, the theory of change is an evaluation tool validated in the nonprofits, healthcare, education, and government sectors. Thus, the next evolutionary step is the logical application of a theory of change for financial institutions as their mission aligns with community and environmental concerns similar to those of other sectors. U.S. Bancorp Impact Finance has become a success story for how the theory of change can be an additional tool in the toolbox and leveraged for different investment strategies and community commitments. This presentation will map the process that gained the Theory of Change a similar internal credibility as OKRs, initiative development plans, and financial forecasting. This expert lecture will leverage the exemplar of U.S. Bancorp Impact Finance to advocate for financial institutions to expand the application of the theory of change to evaluate intended and unintended impact and call for the learnings in the finance sector to be shared with the evaluation field. The lecture is tailored so impact measurement subject matter experts can learn how evaluation tools are gaining utility in new industries and will create a collaborative space for unpack how Theory of Change gain credibility in new fields.