This chapter provides the theoretical foundation of the book by advancing a capability-based framework for evaluating social impact in development interventions. It traces the evolution of social impact assessment (SIA), highlighting its growing emphasis on participation, context sensitivity, and accountability, while identifying persistent methodological limitations related to attribution, participation, and the measurement of lived experience. The chapter positions Amartya Sen’s Capability Approach as a response to these limitations, reframing evaluation around people’s real freedoms to achieve valued ways of being and doing. It introduces a three-determinants framework for assessing capability change: effective access to resources, effective agency, and socio-structural context. Together, these determinants provide a multidimensional lens for analysing how development projects shape well-being, power, and inclusion. The chapter further demonstrates the relevance of this framework for WASH (water, sanitation, and hygiene) interventions, particularly in relation to gender equality, disability inclusion, and poverty alleviation. By grounding social impact assessment in ethics, agency, and intersectionality, the chapter establishes a robust conceptual basis for the empirical analyses that follow.