Celo’s Theory of Change
Celo’s mission is to build a financial system that creates conditions of prosperity—for everyone. This is an ambitious goal. So the team working on Celo wanted to make sure that we had a way to track our progress toward this mission. Enter: our theory of change.
What is a theory of change?
A theory of change is a framework that describes how short-term actions will lead to long-term social impact. Theories of change are popular in the social sectors because they help organizations focus on activities that most directly lead to desired impact. In addition, robust theories of change have tangible metrics (similar to the “KRs” in OKRs) that hold organizations accountable and measure progress toward otherwise nebulous impact goals.
What is Celo’s theory of change?
To answer that question, we start from the end: What is the world that is possible with Celo?
The team working on Celo is united by a single mission: to build a financial system that creates conditions of economic prosperity for all. We define economic prosperity along three verticals:
- Basic needs are met. In order to prosper, every person has a set of basic needs that must first be satisfied. These include access to food, clean water, and basic healthcare.
- Individuals are able to grow along their own path. In robust economies, people are able to prosper by finding opportunities for work and growth. Barriers such as the inability to save, lack of access to capital, or high unemployment prevent communities from achieving prosperity.
- People are supporting each other. Social support is crucial to economic prosperity. For instance, studies have shown a 1% increase in remittance flows could lead to a 16% reduction in extreme poverty. Strong social support structures, enabled by things such as low frictions to send money across borders are key to community resilience.
Celo’s mission is focused on promoting prosperity by meeting basic needs, enabling growth potential, and / or increasing social support. We hope that each contributor to Celo can trace their initiatives toward Celo’s ultimate vision of economic prosperity.
All of our projects have a specific hypothesis that tie our activities to one or more of these indicators of prosperity. For example, we posit that enabling more efficient cash transfers is a powerful tool for helping people meet basic needs. GiveDirectly has chosen to use Celo’s platform to deliver unconditional cash aid in a project that will test this hypothesis.
One important distinction to highlight: Celo’s theory of change is dynamic. We frame our actions in terms of hypotheses because we recognize that there is a lot we do not know about the impact of this technology on social wellbeing. We challenge ourselves to continually learn and adapt.
What about tangible metrics?
The team working on Celo has adopted metrics within each objective that we will track as Celo evolves. While no metric is perfect, we hope that by monitoring and reporting on impact metrics, we can create accountability on our progress toward promoting economic prosperity. The initial set of metrics we hope to track include:
Objective #1: Increase the number of people whose basic needs are met
- # Celo users lifted above the poverty line
- $ amount of humanitarian aid sent via Celo
- # of cash transfer programs and humanitarian aid programs using Celo
- Active ecosystems (i.e. cash-in and cash-out options) in market
Objective #2: Individuals are able to grow along their own path
- # People provided new access to decentralized finance tools (e.g. measured via surveys)
- # Active user base in across all countries
- # of people working on / building on Celo
Objective #3: People are supporting each other
- % reduction in avg. transaction costs for P2P payment
- # P2P transactions in EM countries
- Celo community growth
- # community-organized Celo meetups
- # projects building on Celo
- (Net Promoter Score) Celo team and contributors feel ownership
How does the theory of change impact you?
We hope this framework provides additional clarity about what impact the Celo community could have. We want every contributor to Celo to be able to see how their actions might lead to broader social outcomes. In addition, we hope the community can use this tool to prioritize work — we should use this framework continually ask ourselves whether our actions are advancing the mission of economic prosperity.
As with most organizational frameworks metrics, we expect these to change over time. For instance, we may find it too difficult or unhelpful to track a specific indicator and may adjust. This is a first draft, and we encourage feedback — please let us know if there are other impact metrics that you’d like for us to monitor. If there are other ways for us to improve this theory of change — we welcome the input.
Thank you and we value your time ❤.