VfM: What does it stands for?


In times of austerity, social projects have increasingly been asked by donors to demonstrate their Value for Money (VfM). An idea already present in the 1980s and the 1990s, were development organizations across the world involved in discussions regarding efficiency and effectiveness, option appraisal, and multiple paths to achieving outcomes.

Yet, the term VfM has re-emerged in the vocabulary of public and private spending, particularly, as a backlash to the financial crisis, reinforcing the demand for accountability and rigorous impact evaluation. But what do we really mean by VfM? Some argue that VfM is an elastic concept that currently lacks conceptual properties and boundaries, others ask if VfM “isn’t just the latest flavour of the month” yet, the general idea behind VfM is about maximizing the impact of each monetary unit spent to improve people’s life. In other words, VfM is the “determination to get the most impact for the money we have”. Thus, although definitions differ, a combination of Economy, Efficiency and Effectiveness, the so-called 3 E’s, seems to be at the core of the concept.


VfM explored through a logic model


I build this picture combining my logic model drawing with the diagram of Nicholles & Vardakoulias (2012) on VfM The Independent Commission for Aid Impact adds a dimension of Equity - The 4th E -, which means ensuring that benefits are distributed fairly. The LSE study “Value for Money: Current Approaches and Evolving Debates” complements the 3 E’s with good business practices, Option Appraisal and participation. In the near future I'll come back on this topic with 2 more articles:

  • Methods: how can we prove and improve our VfM?
  • What are the differences between VfM methods?



1. Antinoja Emmi, Kjennerud Maja, Rozenkopf Ilan, Schatz Florian & Eskiocak Ozlem - Value for Money: Current Approaches and Evolving Debates. LSE (2011)

2. Aduragbemi Banke-Thomas, Barbara Madaj, Ameh Charles & Nynke van den Broek - Social Return on Investment (SROI) methodology to account for value for money of public health interventions: a systematic review. Bmc Public Health (2015)

3. David McKevitt & Paul Davis - Value for money: a broken piñata? 257–264 (2016).

4. Jock Baker, Ester Dross, Valsa Shah & Riccardo Polastro - Study: How to Define and Measure Value for Money in the Humanitarian Sector. Swedish International Development Cooperation Agency, Sida (2013).

5. Natalie Nicholles & Olivier Vardakoulias. Introduction to Value for Money (2012).