TRACKING FINANCIAL CAPABILITY

Build Your Logic Model

JANUARY 2015
 Build Your Logic Model

AUTHORS
Pamela Chan, Parker Cohen, Kori Hattemer, Emily Hoagland and Elizabeth McGuinness

ABOUT CFED
CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and
programs that help them achieve the American Dream, including buying a home, pursuing higher education,
starting a business and saving for the future. As a leading source for data about household financial security and
policy solutions, CFED understands what families need to succeed. We promote programs on the ground and
invest in social enterprises that create pathways to financial security and opportunity for millions of people.
Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally
through its offices in Washington, DC; Durham, North Carolina; and San Francisco, California.

ABOUT BANK OF AMERICA CORPORATE SOCIAL RESPONSIBILITY

We have a clear purpose to help make financial lives better for those we serve. Our corporate social responsibility
(CSR) efforts are a demonstration of how we live our purpose, and play a key role in our business strategy of
responsible growth. These efforts guide how we operate in a socially, economically, financially and environmentally
responsible way around the world, to deliver for shareholders, customers, clients and employees. One area of focus
is the role we play to enable and promote financial empowerment, helping individuals and communities to thrive.
We do this through the products we create, the education and resources we provide broadly to consumers, and the
more personalized, hands-on opportunities we help enable through partnerships in our local communities. Through
our partnership with non-profit online education innovator Khan Academy, we provide BetterMoneyHabits.com,
a free education resource aimed at empowering people to be more confident in their financial decision making.
The program pairs Khan Academy’s expertise in online learning with our financial know-how to deliver unbiased
and easy-to-understand information on a wide range of personal finance topics including budgeting, savings and
credit. Learn more at bankofamerica.com/about and BetterMoneyHabits.com.

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Financial capability programs aim to change the lives of their participants and improve
the financial health of the larger community. A logic model is a tool that can help you
plan your financial capability program and decide how to monitor progress, evaluate
results and communicate about your program clearly and succinctly to your funders
and stakeholders.

This guide is the second in a three-part series, Tracking Financial Capability:

Guide #1: Identify and Prioritize Your Expected Outcomes
Guide #2: Build Your Logic Model
Guide #3: Select and Collect Indicator Data
This series is designed for frontline organizations that plan to provide, or are already providing, services
to help clients manage their financial resources more effectively and become more financially secure.
The three guides in this series will help you establish processes to track your programs to ensure they
are being implemented as planned and resulting in the outcomes you set out to achieve. These guides
will help you clearly state up front what you hope to achieve as a result of these services, how you plan
to bring about these changes in your clients’ lives (as depicted in your logic model), and how you will
collect data to track your progress.

A logic model is the foundation for a results-focused program. It should be at the core of program
planning as well as tracking. Logic models are visual tools that tell the story of your entire financial
capability program—how you use resources to implement a program and how that program helps
your clients achieve financial security. Logic models can be read as a series of “if…then” statements. It
illustrates a chain of reasoning that links investments to results. Used in project planning, logic models
allow staff and stakeholders to keep the program’s long-term goals in focus, identify the appropriate
resources and activities required to help fulfill those goals, and uncover uncertain assumptions that
could jeopardize the program’s success.

A well-designed logic model can provide the foundation to support your efforts to collect the data
necessary to answer important questions about the performance of the program. A logic model can
be developed and formatted in many ways. In this document, we are not prescribing the “best way”
to create a logic model. Rather, we are offering you an approach we have adopted based on our
experiences. We organized this guide into 3 sections:

1 Building Out Your Logic Model: Program Process

2 Building Out Your Logic Model: Program Outcomes

3 Using Your Logic Model to Support Program Planning

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 Build Your Logic Model

Figure 1 on Page 2 provides a logic model template with a description of each component for you to follow.
You can use this template to construct your own program logic model. The Appendix provides a sample
logic model for a financial coaching program that we adapted to illustrate a complete logic model.

1. Building Out Your Logic Model: Program Process

The first part of a logic model relates to your program’s implementation or process, including your
program inputs, activities and outputs. It describes the observable characteristics of your program and
demonstrates their relationship to each other.

 Inputs are the resources available to the organization to create and implement the program.
Inputs include funding, staff, equipment, etc.
 Activities are what the program does in order to achieve its desired outcomes.
 Outputs are the direct and tangible products of these activities. Thus, an activity could be a
financial education class, while its outputs are the number of classes taught and the number of
people who attend each class.

FIGURE 1: Logic Model Template

GOAL: This is your vision for the future, what you are trying to achieve over the life of your intervention and the
solution to the problem articulated in your situation statement.

SITUATION: This is a clear articulation of the problem or issue you are trying to solve for the people your program
is serving or will serve.

Program Process (What You Do) Program Outcomes (Desired Effects on Participants)

Short-term Medium-term Long-term

Inputs Activities Outputs
Outcomes Outcomes Outcomes

What we What we do in The direct The measurable The measurable The

invest into the the program products of results we hope results we hope measurable
program performing the to see among to see among results we hope
activities and those we serve those we serve to see among
who is reached in a short in a medium those we serve
timeframe timeframe in a longer
timeframe

ASSUMPTIONS EXTERNAL FACTORS

• The beliefs we have about the program, the people • The factors that might influence your ability to do
involved and how we think change will occur the work you planned
• The theory behind the program or underlying beliefs • The factors that might influence change in your
about how and why it will work participants and community
• The conditions for success • Any potential barriers to achieving the change
you desire

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 Build Your Logic Model

People often confuse outputs and outcomes. Outputs are:

 The direct evidence of having performed Output measures are often
program activities. used to report whether
 Measurements of service delivery, not or not your program is
program impact. on track to meet your
Outputs are NOT: expected outcomes.

 Measurements of program impact.

 Able to tell you whether the program actually changed the lives of the people served.

For example, in a financial coaching program, output measures could be how many times clients show
up for appointments and their satisfaction with the services, while outcomes could be changes in clients’
credit scores.

Measuring outputs is critical to evaluate the performance of your program. Output measures are often
used to report whether or not your program is on track to meet your expected outcomes. Ultimately,
successfully implementing and effectively tracking your outputs is key to understanding how your
program is touching your clients’ lives. This is useful for interpreting your findings when you assess
program outcomes.

TIPS: Distinguishing Outcomes from Outputs

DDOutputs relate to what the program does. Outcomes relate to what difference the program makes.

DDMeasuring outputs often involves counting (e.g., number of students taught, number of students
completing a budgeting exercise, etc.).

DDOutcomes always refer to characteristics that in principle could be observed for individuals or situations
that have not received program services. Program outputs are only experienced by program participants
(e.g., increased balance in savings account, increased trust in financial institutions, etc.).

2. Building Out Your Logic Model: Program Outcomes

Outcomes are the desired impact on targeted clients’ well-being resulting from successfully implementing
the program activities. If you have not yet started to think about the outcomes that result from your program,
you may want to refer to the first guide in this series, Identify and Prioritize Your Expected Outcomes.

The timeline for when outcomes occur varies by type of outcome. Some outcomes might be evident
during or immediately after service delivery, while other outcomes will not be measurable until months
or years after someone participates in an activity or program. Some outcomes depend on others occurring
first. How an organization determines whether an outcome is short- or long-term will depend on service
delivery and the specific outcomes expected for the target population. It is helpful for you to differentiate

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 Build Your Logic Model

between short-term, medium-term and long-term outcomes so you can anticipate when changes will
occur and should be measured.

 Short-term outcomes are those that occur during or immediately after program delivery. They are
sometimes referred to as “take-away” outcomes as the participant should take these with them
when they leave the program.
 Medium-term outcomes (or intermediate outcomes) are those outcomes that occur after the short-
term outcomes and that link short-term outcomes to long-term outcomes.
 Long-term outcomes are the results that you hope your program will achieve.

It’s helpful to think about which outcomes you are most likely to see first. Then, ask yourself, “What
happens next?” Then, “What happens after that?” Going through this series of questions will allow you
to break out short-term, medium-term and long-term outcomes and to understand the relationships
between them.

As a rule of thumb, changes in knowledge, skills and attitudes are considered the easiest to achieve in
the short term. Changes in habits and decision-making occur once changes in knowledge, skills and
attitudes are internalized by individuals. This takes time.1 These outcomes are usually categorized
as medium-term outcomes. Changes in status or life condition, such as household financial security,
typically take the longest to achieve because they result from changes in behavior, and they are often
considered long-term outcomes. For example, for a financial coaching program, a short-term outcome
could be changes in a client’s understanding of the importance of their credit score. This would ideally
cause them to develop a habit of checking their own credit reports and creating a debt management
plan—two medium-term outcomes. Eventually, this might cause the client to see an increase in their
credit score—a long-term outcome that results from the new behaviors. Table 1 provides a general
guide to outcomes categorized according to the sequence in which they happen.

A sample logic model for a financial coaching program is shown in Figure 2 in the Appendix, illustrating
both program process and program outcomes, as well as distinguishing between short-, medium- and
long-term outcomes.

TABLE 1: Short-, Medium- and Long-term Outcomes

SHORT TERM MEDIUM TERM LONG TERM

What the short-term results are What the medium-term results are What the ultimate impact is

LEARNING ACTION CONDITIONS

Awareness Behavior Social

Knowledge Habits Economic
Attitudes Practices Financial
Skills Decision-making Environmental
Opinions Policies
Aspirations Social Action
Motivations

1 Donald L. Kirkpatrick and James D. Kirkpatrick, Evaluating Training Programs: The Four Levels, Third Edition (San Francisco: Berrett-Koehler Publishers, Inc., 2006), 85.
See also A Longitudinal Evaluation of the Intermediate-term Impact of the Money Smart Financial Education Curriculum Upon Consumers’ Behavior and Confidence
(Washington, DC: FDIC, 2007).

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 Build Your Logic Model

3. Using Your Logic Model to Support Program Planning

We have just described and compared the core elements of the logic model. Now we are going to
address the four additional components included in the logic model template in Figure 1 on page
4. These components are helpful for communicating the goal of your program, the problem you are
trying to solve, your assumptions about how your program will work and the aspects of the external
environment that will promote or hinder program success. This information is useful for guiding
program planning, as well as for communicating your program and the rationale behind it to funders.
See Figure 2 in the Appendix for an example.

 Goal: This is your vision for the future; it is what you are trying to achieve over the life of your
intervention. It is the solution to the problem you articulate in the Situation statement.
‡‡ For example: To increase financial security for low-income families in Essex County through building
financial capability.
 Situation: This is a clear articulation of the problem you are trying to solve for the target population.
It should answer the following questions: What is the problem? Why is it a problem? For whom is it
a problem?
‡‡ For example: Low-income families are spending too much on high-cost debt that is reducing household
consumption and preventing families from saving for the future.
 Assumptions: These are the beliefs you have about your program, the people involved and how you
think change will occur. They are the theory behind the program. Documenting the assumptions
behind a program and behind the logic model is a good way to make implicit assumptions explicit.
This can serve to ensure that all staff and stakeholders have a common understanding of how your
program will work.
 For example: By providing an engaging financial capability program that teaches appropriate knowledge
and skills and promotes proactive attitudes, our clients will adopt positive financial management behaviors
that will result in decreased debt and higher household savings.
 External Factors: These are factors that might influence your ability to do the work that you planned.
These factors could be barriers to impacting the change you desire.
‡‡ For example:
▪▪ In emergencies, low-income households can only borrow from high-cost, short-term lenders.
▪▪ Proposed state legislation will soon cap interest rates charged by high-cost, short-term lenders.
▪▪ A lack of public transportation in our city will make it difficult for some people to access the financial
coaching sessions.

Stating your program’s implicit assumptions and laying out the external factors that may affect your
program implementation is an important step, but you will need to re-visit these as the program or situation
changes to make sure they remain relevant. Situational changes in the program environment sometimes
require that you reexamine and possibly change multiple aspects of your logic model and program design.

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 Build Your Logic Model

Looking Ahead: Select and Collect Indicator Data

The next step is to select indicators and collect data to track your program’s performance. In the third
guide in this series, Select and Collect Indicator Data, we will show you how to take your logic model
and turn it into a rich set of data that can be used to assess how you are doing with your program,
determine whether or not you need to refine your program, communicate your program’s potential
and lay the foundation for a formal impact evaluation.

If you have not yet identified and selected your program outcomes, see the first guide in this series,
Identify and Prioritize Your Expected Outcomes. This guide will assist you to:

 Understand what financial capability outcomes are.

 Identify desired financial capability outcomes for your clients.
 Prioritize financial capability outcomes to track.

Additional Resources
To learn more about logic models and about tracking financial capability in general, the following resources
are helpful guides:

 Handling Data: From Logic Model to Final Report by Gail V. Barrington.

 Evaluation: A Systematic Approach by Peter H. Rossi, Mark W. Lipsey and Howard E. Freeman.
 Enhancing Program Performance with Logic Models, University of Wisconsin-Extension.
 Finding a Yardstick: Field Testing Outcome Measures for Community-based Financial Coaching
and Capability Programs by J. Michael Collins.
 Measuring Outcomes of Financial Capability Programs: Success Measures Tools for Practitioners,
NeighborWorks America.

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 Appendix
FIGURE 2: Example of Financial Coaching Logic Model for Program Planning Purposes

GOAL: To increase financial security for low-income families in Essex County through building financial capability.

SITUATION: Low-income families are spending too much on high-cost debt which is reducing household consumption and preventing families from saving for the future.

Programs Process (What You Do) Program Outcomes (Desired Effects on Participants)

Medium-term
Inputs Activities Outputs Short-term Outcomes Long-term Outcomes
Outcomes

Staff – financial Program: Number of people who Program participants: Participants: Participants have:
coaches attend first session
Provides weekly Know how to establish Use a spending plan Reduced levels of debt.
Resources – office coaching sessions for Attendance rate (% of financial goals, access or budget to manage
space, supplies, all members of the clients who attend first a credit report and expenses. Increased credit scores.
money for incentives program. session) manage money.
Have fewer debts past Emergency savings that
Coaching program Conducts outreach Retention rate (% of Are confident in their due. will cover three months
plan to people who do clients attending the financial management of expenses.
not attend or stop first session who attend abilities. Pay their bills on time.
Evaluation plan Achieved their financial
attending sessions. subsequent sessions)
Are able to develop Regularly set aside goals.
Number of sessions and follow a spending emergency savings.
Increased levels of
held weekly and overall plan or budget.
Have set up automatic financial well-being.
Length of each coaching deposit or electronic
interaction transfer to put away
savings for the future.
Percentage of satisfied
clients (% of clients Spend less than they
who rate the coaching earn.
satisfactory or better)
Have at least one
financial goal.

ASSUMPTIONS EXTERNAL FACTORS

By providing an engaging financial capability program that teaches appropriate In emergencies, low-income households can only borrow from high-cost, short-term

Tracking Financial Capability

knowledge and skills and promotes proactive attitudes, our clients will adopt positive lenders. Proposed state legislation will soon cap interest rates charged by high-cost,
financial management behaviors that will result in decreased debt and higher short-term lenders. A lack of public transportation in our city will make it difficult for
household savings. some people to access the financial coaching sessions.

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Build Your Logic Model