Increased attention to impact evaluation arose out of increasing pressure to show results from public spending. It was soon realized that outcome monitoring said nothing about how an agency’s programs were affecting those outcomes – the attribution problem. When it came to attribution, there was shockingly little concrete evidence about what worked and what didn’t – a fact highlighted in the work of the Evaluation Gap Working Group, initiated by the Center for Global Development (CGD), and the Group’s report When will we ever learn? The Working Group recommended the establishment of a new entity to fill this gap. The idea for what was to become 3ie was born.

High-level participants at a meeting in Bellagio, Italy, in June 2006 endorsed this recommendation to establish a new entity to channel funds to high-quality, independent impact evaluations around an agenda of key questions that confront policymakers. CGD was asked to serve as the temporary secretariat for a "Leading Edge Group" of donors and developing country governments to design and take forward this initiative. Comprised of government officials from developing countries who have a strong interest in issues of effectiveness and accountability, as well as representatives of bilateral donor agencies, multilateral agencies, non-governmental organizations, and foundations that are prepared, at this juncture, to commit to collaborating and dedicating significant funds, this group reached agreement about financing and governance arrangements in early 2007. These agreements are recorded in the Founding Document.

The next steps were the recruitment of the first Executive Director, toward the end of 2007, and agreement that the Global Development Network would act as a host institution for 3ie.

At present 3ie is incorporated in the United States as a non-profit organization. It is intended to seek international organization status in due course.