As politicians slash education budgets and defense spending soars, many impact investors are expanding their investment theses to include education. They know that education investment is not just a moral imperative, but also a strategic lever for long-term societal value, from peace-building and climate resilience to safeguarding democratic institutions.
As more impact investors begin to enter the education space, many ask a simple but vital question: How do we measure the return on learning? Unlike the health or environmental sectors where impact can be seen in lives saved or emissions reduced, education’s outcomes unfold over years, even decades.
Return on learning
The standard way of presenting educational impact (showing learning gains) has been “equivalent years of schooling,” based on estimates of the dollar returns to additional years in school. However, this metric tells us very little about the actual learning progress of an individual child – which is where the real return should be measured.
When researchers seek to prove whether an education program truly works, they are stuck between two imperfect methods. On one hand, classroom-based testbeds reflect real-world conditions but are full of messy variables research can’t fully control. On the other hand, tightly controlled experiments, such as randomized controlled trials, eliminate bias but often fail to translate across contexts. What works in one school system might flop in another.
The ongoing challenge in educational impact measures is balancing scientific rigor with practical relevance.
There’s a divide in the sector: some argue that interventions based on locally relevant data and participatory methods lack the rigorous standards needed, while others criticize controlled trials for overlooking teachers and the unique local context. Both approaches are valid and essential, yet merging them within a single program has been a challenge.
Until now, educational funding has largely favoured either grassroots, participatory “sandbox” approaches or rigorous randomised controlled trials. The main barrier to funding both? Cost. Funding typically supports either one type of evaluation or the other, but a comprehensive, holistic evaluation that integrates both strands of research falls beyond education budgets.
Opportunities for impact investors
Impact investors have a unique opportunity to provide the holistic, comprehensive funding that education needs to support both rigorous evaluations and contextually relevant, participatory approaches.
This kind of approach requires building a portfolio of diversified impact metrics: a portfolio that tracks standardized learning outcomes across all investments, while also capturing the unique, context-specific progress of each individual investment program. It’s a dual-layer strategy, much like the one used by global agencies conducting multi-country evaluations. Drawing from both these large-scale insights and the science of learning, we know that understanding how children make progress requires a mix of static standardized assessments and dynamic, continuous measures of individual learning potential.
Adopting multiple impact indicators can overwhelm interventions, diverting time and resources away from improving actual learning. This can lead to the classic tension in impact investment where the push to demonstrate impact may inadvertently distort the very outcomes we aim to improve. Several unintended consequences have been noted by researchers, such as teaching to the test just to meet investment benchmarks, or the inefficiencies that sometimes arise from open-ended, participatory methods. Quality impact indicators are key.
In our recent paper published in Nature, we outline the impact metrics for five interconnected areas of educational impact: efficacy, effectiveness, ethics, equity, and environment. These metrics were created through an iterative process involving comprehensive literature reviews, reported in five separate research reports, and consultations with stakeholders, including investors. In the paper, we present indicators that can be combined into a single, unified impact score.
This combined impact score integrates evidence from controlled experiments measuring efficacy through standardized tests with contextual, locally produced evidence from participatory effectiveness studies. Although these studies use less standardized measures, established benchmarks of rigor exist, and by focusing on the rigor-to-relevance ratio, we can develop agreed-upon protocols and methodologies for documenting diverse forms of evidence.
Our impact score merges learning outcomes from randomized controlled trials and sandbox methods with broader considerations of ethics, equity, and environment, applying clear methodological rigor to generate specific measures and align them with impact scores for funding decisions.
In this way, impact investors have a unique opportunity to drive sustainable change in education with research-driven, rigorous impact measures tailored specifically to the sector.
Professor Natalia I. Kucirkova is director of the International Centre for EdTech Impact.
