Are you a social or environmental purpose organization wanting to create a long-term change with your activities and resources? Are you being required to report on your impact, but aren’t sure where to start?
Currently, the two most accepted and wide-spread frameworks to document your impact measurement and management strategy are: Theory of Change, and the 5 Dimensions of Impact by the Impact Management Project. Today’s video will focus on how to define your organization’s Theory of Change.
The Theory of Change is the foundation for any mission-driven initiative working on solving the globe’s most pressing social and environmental issues. Sometimes referred to as T. O. C., the Theory of Change documents the impact that your organization is seeking to achieve, as well as all the intermediate steps to make sure that your activities and resources are well aligned with said change. The TOC should be defined before starting any new initiative or project, and needs to be revised periodically, as your initiative evolves.
This article will help you make your impact strategy actionable through the Theory of Change framework. And, in the future, we will also discuss the second most common impact strategy framework: 5 Dimensions of Impact by the Impact Management Project.
We will also go in-depth into impact metric selection, data collection strategy, and impact reporting.
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Without further ado, let’s jump into the foundation of an effective impact measurement and management strategy: Theory of Change.
Let’s start by discussing what makes the Theory of Change such a fundamental step?
All the operational decisions around what outcome data to collect, assess, and analyze, AS well as the changes that need to be made to improve the effectiveness of your intervention, ALL depend on your Theory of Change. The key value of this framework is that it fosters accountability and awareness about the potential challenges that your organization might face while pursuing its mission.
Now, as mentioned before, the theory of change ideally needs to be defined before starting your initiative, project, or program.
These initiatives might have a broad scope such as Higher Education, Health and Wellness, or Financial Inclusion.
Or, they might have a narrow scope, such as Job Readiness, Maternal Health, or Housing Loans.
Whatever program structure you decide to use, make sure that it’s aligned to your Mission statement and that you are not overcomplicating it. Even if you work with partner organizations across a wide spectrum of issue areas, stick to outcomes that are a significant part of the scope of your organization.
Now, we’re ready to create a sample Theory of Change for an organization called "AmericaWorks" with the program, "Skills Development."
We’ll start from the desired impact, and work our way backwards to the resources we’re putting into our programs to make this impact or change happen.
Theory of Change Components
Step One: Impact
The impact is the systemic change that you expect to see in the long-term. Impact usually takes a few years to happen, which makes it difficult to measure, but it does give us a great foundation to define the outcomes which are within our reach to influence and measure.
Step Two: Outcomes
Outcomes are the intended and unintended changes that your stakeholders are experiencing or might experience with your intervention. In other words, outcomes are the broader benefits we work to achieve. In our Skills Development example, one outcome could be “increasing job placement”. How do we know that we are increasing job placement? - By keeping an eye on the number of people placed and retained after their onboarding training.
A well-designed Theory of Change should include long-term, mid-term, and short term outcomes. As you demonstrate clear improvement in your outcomes, you are more likely to get other players such as government or public and private partners to step in to help you scale your mission.
Good outcome measurement requires designing a stakeholder survey that includes baseline, mid-line, and exit line results.
Step Three: Outputs
The outputs are the immediate results of our activities or products, and they are necessary for achieving the outcomes. Think of them as positive indicators that the outcomes are on track.
As per our Skills Development example, one output could be the “increase in the number of people graduating from our business training”. In this case, we are assuming that as more and more people go through a quality marketable training, there is a greater possibility of an increase in successful job placements. To dig deeper, collecting some demographic data, along with service data can help to draw useful connections.
Step Four: Activities
In this step, we answer the question “what activities need to take place for each output to happen?”
Providing people with high-quality training is one of the activities directly aligned with our sample output and outcome. Along with quality skill-building training, an activity can also include resume preparation, or interview preparation. All of these increase the number of successful placement possibilities.
Step Five: Inputs
Inputs refer to the resources or investments needed to ensure that the activities take place. According to our example, we need need quality course materials, skilled trainers, a physical venue or an online host, investment, and more.
So, to recap:
The five components of a Theory of Change are: Inputs, Activities, Outputs, Outcomes, and Impact.
The TOC needs to be aligned to your initiative, project, or program and stated mission.
The most important components to monitor are the Outputs and Outcomes, so make sure to define relevant metrics and track results over time.
And, Everywhere possible, we should include stakeholders data, such as demographics and surveys to capture their feedback.
Finally, it’s important to highlight that implementing an impact measurement and management strategy requires some change management. Here are some quick tips to ensure success throughout this process:
- Involve your key stakeholders. A stakeholder is any person benefited or affected by your activities.
- Communicate your intent to implement or improve your impact measurement and management strategy. In the beginning, this might be done through information sessions open to anyone interested in learning more about the new impact measurement process.
- Remember that the desired outcomes motivate people. Be sure to expose the need for change to the whole organization and clearly describe how the change will benefit each area of the organization.
Here at sopact, we understand that organizations just like yours face challenges with impact measurement and management on a daily basis. So we’ve developed a platform that streamlines the process, starting by documenting your Theory of Change.
Read More: 5 Ways to Improve TOC models for Non-Profit Organizations
Read More: How to define Social Impact Outcome Metrics?