University-community engagement represents a critical dimension of higher education institutions’ roles in society, focusing on fostering mutually beneficial partnerships between universities and local communities. This study reviews and synthesizes existing methodologies for evaluating the bidirectional impact of these engagements, emphasizing the need for a comprehensive framework that integrates both quantitative and qualitative analyses. The review identifies key approaches such as Data Envelopment Analysis (DEA) for measuring efficiency, Ex-Post Impact Assessment for quantifying economic, social, and psychological impacts, and Socially Modified Economic Valuation (SMEV) for assessing social value. Furthermore, qualitative methodologies, including Sequential Explanatory Design and Evaluation Capacity Building (ECB), are discussed for their role in capturing the nuanced, context-specific benefits of these engagements. The proposed integrative methodology combines these approaches to provide a holistic evaluation framework that not only measures tangible outcomes but also captures the intangible benefits that contribute to the long-term sustainability of university-community partnerships. The application of this methodology is illustrated through simulated data, demonstrating its utility in real-world contexts. This study underscores the importance of adopting a multifaceted evaluation strategy to accurately assess the impact of university-community engagements and inform future policy development. The findings contribute to the ongoing discourse on enhancing the societal role of universities by ensuring that engagement initiatives are both effective and sustainable.