Possibly the biggest question facing organisations working to alleviate poverty is … “How do we know if we are moving the needle of transformation?”

poverty stoplight approach compass
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Research shows that few programmes have a methodology or metric for impact assessment that can categorically prove that they are meeting their mandates. The majority of outcomes and impacts for poverty-related programmes are measured using income generation or household costs as the main indicators and there has been little effort to use M&E tools beyond the traditional money-metric method. It is well documented that financial indicators are often inadequate in mapping social and cultural wealth.

These methods do not take into consideration all the dimensions of poverty, which results in the watered-down delivery of poverty reduction rather than poverty eradication.

It appears we are failing in many of our attempts


  • We do not see people who are struggling with socio-economic challenges as the main actors in eliminating poverty from their lives.
  • We plan around individuals instead of families and we measure our programme’s impact against individuals, not realising that it is the family unit that is in poverty; additionally, poverty does not affect families uniformly, therefore solutions out of poverty will differ for each family.
  • We don’t engage with families in self-diagnosis and, as a result, we implement programmes based on what we think the people need (issues of exclusion).
  • Once programmes are running, we measure only certain aspects of poverty that supports our pre-determined criteria for success, forgetting that poverty has many dimensions that are interconnected and may block our programmes from achieving greater impacts in the long-term.
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A New Approach is Required

To understand a problem from all standpoints, it is necessary to include the valid perspectives of everybody involved – the family in poverty, the community, the social activist, the non-profit attempting to provide support, the micro-finance institution, the social entrepreneur, the government agency, the international donor, etc. We need to contrast poverty with non-poverty and then take action to address the difference and we need to understand that the families can be motivated to pull themselves out of poverty.

Poverty Stoplight Logo

The Poverty Stoplight approach is based on the following principles:

Principles of the approach

Note: The desire is not to replace existing M&E methodologies but to add a strong complementary approach that is backed up by the experience and excellent history of success from existing users of this approach



The Poverty Stoplight methodology and metric has been developed by Fundación Paraguaya based on the philosophies and frameworks of two social scientists in the human development and behaviour space.

(1) Ken Wilber: “Integral Theory”

(2) Joseph Grenny & Co: “Influencer: The New Science of Leading Change”