Theory of Change – what is it and why do I need one?

What is a theory of change?

A theory of change should be at the core of your impact measurement methodology. Your theory of change should succinctly outline what is the need, what your intervention does (activities) and what you plan to change as a result (outcomes).

A Theory of change is also referred to as a logic model. Most organisations who have a theory of change will create a diagram which shows how their intervention logically creates steps towards achieving the desired outcomes.

Why is a goal not the same as a theory of change?

Many people we talk to have a very clear goal as an organisation and will tell you that they have an agreed set of outcomes they are looking to achieve. In our experience, only ones with a theory of change actually turn out to have an agreed set of outcomes, a clear understanding on how their intervention will create change and have a narrow set of outcomes with clear indicators to prove change has happened.

Why is less more when it comes to outcomes?

The process of creating your theory of change will make you really interrogate your desired outcomes. During this process you will begin to understand if outcomes are shorter term and really a stepping stone to longer-term outcomes, you will question whether outcomes are attributable to your organisation and if certain outcomes do not contribute to the ultimate outcome which you designed your intervention to solve.

Having outcomes which overlap or contribute to the achievement of other outcomes in your theory of change may lead to double counting of impact. Another issue that arises around double counting and attribution, is if you are claiming impact for outcomes which are actually delivered by other organisations, they might also be counting these outcomes in their outcomes measurement reporting.

If you have a narrow but clearly defined set of outcomes which collect very clear indicators of change, you can be confident that you are reporting on your organisation’s social impact.

Why do I need a theory of change?

Theory of change has several strategic uses within an organisation. It is at the core of your strategy and is the building block for your intervention’s design and delivery. The continuous improvement of your intervention and how you adapt your intervention to maximise impact comes from constantly using your theory of change to question your processes and impact.

Once you have an agreed theory of change, your evidence base and indicators of change will be built off it. Your outputs and outcomes will be linked to your theory of change allowing you to only collect relevant and essential data.

The theory of change diagram can be used to quickly introduce your intervention to stakeholders. You can walk them through the different stages and then explain the logic which connects the different stages of your theory of change. All of your impact reporting can be presented by the impact you are having on outcomes rather than a focus on intervention delivery. Stakeholders will clearly understand how your organisation has a social impact.

How do I begin creating a theory of change?

1. Involve a range of stakeholders in the process
2. Begin by working back from your desired outcome or forward from the need you are solving
3. Create a theory of change and continually adapt it through the process
4. Create a final version and present it back to everyone who inputted into the process

There are numerous guides available which outline the steps you need to take to develop a theory of change and we would highly recommend New Philanthropy Capital’s “Creating Your Theory of Change”.

How can the ASVB help?

We can provide advice on how to create your theory of change or test out your assumptions if you already have a theory of change. In fact, this is one of the initial steps we go through with prospective and new customers to get them ready to use our Social Value Calculator.

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