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New age of nonprofit theory of change to automate impact insight

A good nonprofit theory of change model is the first step towards creating the impact an organization aims to bring.
Category
Strategy
Written by
Unmesh Sheth
Published on
May 3, 2019

A nonprofit theory of change outlines how planned actions are expected to lead to desired social or environmental outcomes.

Designing Nonprofit Theory Of Change 

A theory of change (TOC) is a tool nonprofit organizations use to describe the logical sequence of steps leading to a desired outcome or impact. It is a way of thinking about and planning for change. It helps organizations clarify their goals and strategies, identify the resources and interventions needed to achieve them and measure progress over time. By developing a TOC, nonprofits can communicate their impact to funders, partners, and other stakeholders and use it to guide decision-making and resource allocation.

This article provides a solid foundation to take the theory of change to new heights.  First, Chirs Gains offers a practical approach to designing a theory of change. Next, it will guide you through our revolutionary impact strategy app. The article also includes examples to illustrate the concept.

 

A basic theory of change enables organizations to clarify their objectives, outcomes, and strategies for achieving them. It acts as a roadmap, guiding decision-making and ensuring organizations stay focused on their mission.

Theory of Change to Impact Data Strategy

Designing and implementing a well-crafted theory of change has some additional steps essential to ensure your nonprofit organization thrives. Here are some valuable tips to assist you in creating an impactful theory of change:

First, clearly articulating your organization's mission and vision and how it aims to bring about positive change in the world. Your theory of change should align with your organization's overall strategic plan, reflecting its values and goals. It should provide a comprehensive overview of your nonprofit's objectives, the context in which it operates, and its challenges. 

You need to take a few more steps to further enhance your theory of change, as you will see in the Sopact Strategy Application. Do not miss a video where IMPACTO, your onboarding coach, offers a step-by-step approach that you can follow. 

Sign up for our free Impact Strategy app to quickly build a logic model/TOC, metrics alignment, data strategy, and automated insights.

To further understand the steps let's take a practice example below.

Nonprofit theory of change example

Imagine an organization called "Girls Code" dedicated to transforming lives through empowering employment opportunities. This article will delve into the step-by-step process of developing a model, using this fictitious organization as our guiding example. By the end, you'll clearly understand how to create a powerful theory of change.

Disclaimer: The provided "Girls Code" example is intended for illustrative purposes only. Any resemblance to actual persons, organizations, or events is purely coincidental.

Fig: Girls Code

Every nonprofit commits to building a theory of change, a strategic framework that outlines the organization's goals, activities, and expected outcomes. However, one common mistake organizations make is outsourcing it solely to satisfy funders' grant applications. This approach often leads to a disconnected theory of change, the organization's work, and learning.

Instead, nonprofit organizations need to recognize the real value of developing a theory of change that goes beyond simply fulfilling funding requirements. The true value lies in learning from stakeholders' feedback, outcomes, outputs, and activities in a relatively short period, allowing for a lower learning curve. This learning requires data. 

By actively involving stakeholders in the development process, nonprofit organizations can gain valuable insights and perspectives. This inclusive approach ensures that the theory of change considers marginalized communities' unique needs and challenges, making it more effective in driving meaningful impact.

Furthermore, it is important to remember that a theory of change should be a living document that guides the organization's work and decision-making. It should not be a static document that is forgotten once developed. Regular review and adaptation of the theory of change based on ongoing evaluation and feedback is crucial to ensure its relevance and effectiveness.

Step 1: Social Impact Statement

The intended impact statement is a clear and concise statement that describes the outcome the organization aims to achieve. It should be specific, measurable, and achievable. For example, an organization that seeks to improve access to education in underserved communities might have an intended impact statement of "Improved access to education in underserved communities."

Social Impact Statement Example

To address the social impact of a problem, we can use the following format:

"[Problem] is a challenge faced by [target audience] because of
[cause]. This has significant consequences, leading to [impact],
and therefore creates a pressing need for [solution]."

[Problem] Human trafficking is a global problem that disproportionately affects young girls aged 15, 16, and 17 from vulnerable communities and underprivileged regions. They are particularly targeted by crime networks for exploitation and forced labor.

[Target audience] Young girls aged 15, 16, and 17 from high-risk and underprivileged regions worldwide and families.

[Cause] These girls are particularly vulnerable due to poverty, lack of education, and limited economic opportunities in their communities, making them susceptible to human trafficking networks.

[Impact] Even when rescued from such situations, these girls often lack opportunities to obtain a quality education and secure high-paying jobs. This perpetuates their vulnerability and limits their prospects, trapping them in poverty and exploitation.

[Solution] There is an urgent need for programs focusing on upskilling and empowering these girls through technical training. By providing them with essential skills and education, we can help them break free from the cycle of exploitation and improve their chances of accessing better job opportunities, thereby offering them a chance for a brighter future.

By presenting a clear social impact statement, we can shed light on the challenges faced by our target audience and emphasize the importance of finding effective solutions.

Fig:Problem statement

After designing a clear problem statement, the next step is to focus on the necessary activities. This process follows a logic model-based approach to create a more actionable strategy for understanding activities and outcomes.

Intermediate outcomes are crucial as they are specific and measurable changes that organizations expect to see due to their activities. These outcomes should be closely linked to the intended impact statement and demonstrate how the organization's work contributes to achieving that impact. For instance, an organization striving to improve access to education in underserved communities may have intermediate outcomes such as "Increased enrollment in local schools," "Improved academic performance of students," and "Increased retention rates."

Developing a theory of change should be seen as an opportunity for nonprofit organizations to learn, grow, and continuously improve their strategies. By embracing stakeholder engagement, being open to feedback, and actively using the theory of change to inform decision-making, organizations can maximize their impact and create positive change in their communities.

Take a closer look at the following example and discover how a few straightforward steps can set you on the path to developing a learning-based approach in just a few days.

Nonprofit Theory of Change Template 

Defining a social impact or problem statement can provide valuable insight into core activities. As demonstrated in the earlier segment, a social impact statement can guide the development of a theory of change, outlining the key outcome, output, and activity relationships. By utilizing this approach, organizations can establish a clear path from activities to outcomes or outcomes to activities, creating a logical model for achieving their intended impact. 

When you signup look for the library where you will find over 200+ templates. Just look for a template called "Girls code" once you log in to the app.

 

Ttheory of change  and Data Strategy

Theory of Change worksheet

Impact Cloud, an innovative tool, simplifies developing a theory of change worksheet. By automatically generating this worksheet, nonprofit organizations can ensure the success and impact of their Girls Code educational program. The worksheet helps establish a clear set of metrics that align with the program's different stages, including activities, outputs, and outcomes.

These metrics are crucial in measuring progress, tracking achievements, and continuously gathering insights to improve the program. With Impact Cloud's user-friendly interface, organizations can easily input their data and generate comprehensive reports highlighting the program's impact.

By utilizing this tool, organizations can streamline their data collection and management processes, ensuring accurate and reliable data for the metrics. The worksheet suggests various data sources, such as a Learning Management System (LMS) database for activity metrics, Google spreadsheets for output metrics, and Sopact surveys for outcome metrics.

For example, the activity metrics may include the count of technical lessons available on the LMS system, which can be sourced from the LMS database. Similarly, the number of girls registered on the online LMS platform and the number of girls who successfully built an app after completing the course can also be tracked using the LMS database.

Output metrics, such as the number of girls who finished the course successfully with a passing score on the completion test and the number of girls who secured a job in the tech industry after completing the course, can be obtained from the LMS completion records and job placement data.

To measure the program's outcomes, the worksheet suggests tracking the percentage of girls earning above the median salary for their location. This data can be collected through Sopact surveys and job salary information.

With the help of Impact Cloud's theory of change worksheet, organizations can easily monitor their progress, identify areas for improvement, and make data-driven decisions to maximize the impact of their Girls Code educational program. This automated tool simplifies the process, allowing organizations to focus on empowering young girls and creating positive change in the tech industry.

 

Impact Metrics
Fig: Map what you measure

Data Sources

To ensure accurate and reliable data collection and management for the metrics, it is crucial to establish a well-structured data table and utilize reliable data sources. Real-time connection to these data sources is essential for obtaining more precise data. In the example provided, a combination of databases for activity, Google spreadsheets, and Sopact surveys for outcome learning is utilized. If you are in the planning phase and do not have access to these databases yet, you can start with a simple design on Google Sheets or Excel. As your program grows and scales, you can directly connect your data sources, such as a database, for seamless data integration.

Impact Metrics
Fig: Map where the data comes from

Activity Metrics and Data Sources:

A number of technical lessons on the Learning Management System:

Metric: Count of technical lessons available on the LMS system.

Data Source: LMS Database (let's say PostgreSQL)

A number of girls registered on the online LMS platform:

Metric: Count of unique records for girls registered on the platform.
Data Source: LMS Database (say PostgreSQL), where registration data is maintained.

Output Metrics and Data Sources:

A number of girls that build an app post-course:

Metric: Number of girls who successfully build an app after completing the course.
Data Source: LMS completion records and mobile app completion data in Google Sheets.

A number of girls finished the course successfully with a passing score on the completion test:

Metric: Number of girls who completed the course with a passing score.
Data Source: LMS completion records and test scores.

A number of girls who secured a job in the tech industry after completing the course:

Metric: Number of girls who secured a job in the tech industry.
Data Source: LMS completion records and job placement data.

Outcome Metrics and Data Sources:

% of girls that earn more than the median salary for the position based on the location:

Metric: Percentage of girls earning above median salary for their location.
Data Source: Sopact Survey data and job salary information.

% of Girls saved from trafficking and took a job in the tech industry:

Metric: Percentage of girls saved from trafficking and employed in tech.
Data Source: Sopact Survey data and job placement records.

% of girls expressing satisfaction over job quality and work environment:

Metric: Percentage of employed girls expressing job satisfaction.
Data Source: Sopact Survey data and feedback from employed girls.

Step 4: Review, Certification, and Automated Analytics

To truly drive impact, every nonprofit must embrace a data-driven approach. Organizations can unlock their full potential by prioritizing a culture of learning and continuous improvement over mere reporting and compliance. This process requires becoming a data owner and adopting a lean and iterative approach. While this may seem daunting, partnering with experienced collaborators can provide a better transition.

You can work alongside an impact consultant or partner with Sopact. Our team of certified experts in Impact Measurement and Management (IMM) will provide in-depth feedback on the three steps discussed earlier. It's important to understand that our goal extends beyond creating a logic model or theory of change. We aim to develop an automated approach to impact measurement and management, ensuring you gather the most suitable and efficient data to meet your learning, reporting, and storytelling needs at every stage of your IMM.

The objective is to establish an efficient method for gathering data and obtaining automated insights, enabling continuous learning and improvement based on outcomes. This is where the Impact Cloud's power lies. See the example below for the transformative effects of defining data sources and leveraging automated insights.

Fig: Automated Analytics

Conclusion

Crafting a theory of change for a nonprofit organization involves much more than simply selecting activities, outputs, and outcomes. The true value lies in creating an actionable approach that incorporates stakeholder learning. By following the steps outlined in this example, you can understand how to design an impact data strategy that aligns with your theory of change.

Through defining metrics and establishing corresponding data sources, we create a robust framework for assessing the impact of the Girls Code educational program. The data collected from various stages - activities, outputs, and outcomes - will provide valuable insights to refine the program, improve learning experiences, and ultimately empower young girls through coding education, leading to an enhanced quality of life.

Embrace the journey of building your theory of change and impact framework with enthusiasm and positivity!

Disclaimer: The provided "Girls Code" example is intended for illustrative purposes only. Any resemblance to actual persons, organizations, or events is purely coincidental.

Learn More: Impact Measurement

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