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Frame 18
An Actionable Guide

Theory of change

Transform your program with an actionable theory of change using Sopact's impact management guide. Take the first step towards measurable impact today.

toc-1

What is theory of change (TOC)?

Theory of Change (ToC)  is a framework for planning, implementing, and evaluating social impact programs. It provides a clear roadmap for identifying the necessary steps and outcomes to achieve a desired goal. Creating a Theory of Change with Sopact's Impact Strategy app has never been easier.

Developing a Theory of Change is essential for any organization looking to create impact. By clearly defining the change you want to create, you can ensure that your programs are effective and impactful. However, developing a Theory of Change can be challenging, especially considering the numerous stakeholders and variables involved in social impact work.

Sopact's Impact Strategy app makes developing a Theory of Change a breeze. You can easily create actionable steps toward impactful change with access to a library of strategies, training, and examples. From mapping out your goals to tracking progress, Sopact's app provides all the tools you need to make a difference.

Take the first step towards creating impact today by exploring Sopact's Impact Strategy app. Review our impact strategy video, access our library of strategies, and learn from real-world examples to start making a difference in the world.

Free

Theory of change training

The theory of change is the foundation for understanding the social impact of programs, products, or services. 

  1. Introduction to the theory of change [7 min]
  2. Introduction to impact strategy  [7 min]
  3. Demonstrate impact effectively [7 min]
  4. Impact, Data, Analytics [60 min] ** Highly Recommended **

Theory of Change Model

A theory of change model is a way to understand how different things can work together to achieve a goal. It is often used by groups or organizations to plan how to reach their goals, especially in social and political situations.

In this model, we identify the different factors that we think are important for reaching our goal, and we show how they are all connected and might affect each other. This helps us understand how to make a plan to reach our goal.

Theory of Change (TOC) and Impact Management (IMP) are the secret sauce to demonstrate the impact.

Currently, the two most accepted and widespread frameworks to document your impact measurement and management strategy are the Theory of Change and the 5 Dimensions of Impact by the Impact Management Project. We often recommend that social enterprises or nonprofits start with designing the organization's Theory of Change.

The Theory of Change is a way to understand how we can solve big problems in the world, like social and environmental issues. It helps us understand what we want to achieve, and how we can make sure our activities and resources are used in the right way to reach our goal.

We use the Theory of Change, also called T.O.C., to plan and guide our work. It's important to think about the Theory of Change before starting a new project or initiative and to update it every so often to make sure we're still on track.

The Theory of Change is essential because it helps us make good decisions about our work and how we can improve it. It helps us decide what information we need to collect and how to use it to enhance our work.

The Theory of Change also helps us be accountable and aware of any challenges we might face while trying to achieve our goals. That's why it's essential to think about the Theory of Change before working on a new project or program. It helps us plan and makes sure we're on the right track.

These initiatives might have a broad scope, such as Higher Education, Health and Wellness, or Financial Inclusion. Or, they might have a narrow range, such as Job Readiness, Maternal Health, or Housing Loans. 

Whatever program structure you decide to use, please ensure that it aligns with your Mission statement and does not overcomplicate it. Even if you work with partner organizations across a broad 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 backward to the resources we're putting into our programs to make this impact or change happen.

How to optimize the Theory of change?

Step by step by guide to optimizing Theory of change  

Theory of change components

  • 01 Impact
  • 02 Outcomes
  • 03 Outputs
  • 04 Activities
  • 05 Inputs

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. 

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 outcomes, mid term outcomes, and short-term outcomes. As you demonstrate a 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.

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 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.
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.
Inputs refer to the resources or investments needed to ensure that the activities take place. According to our example, we need quality course materials, skilled trainers, a physical venue, or an online host, investment, and more.
Best Practices

Theory of change framework

  • The five components of a Theory of Change are- Inputs, Activities, Outputs, Outcomes, and Impact.
  • The theory of change needs to be aligned with your initiative, project, or program and stated mission. 
  • The most critical components to monitor are the Outputs and Outcomes, so could you define relevant metrics and track results over time? 
  • And we should include stakeholder data, such as demographics and surveys, to capture their feedback. 

  • Please be sure to include your key stakeholders. A stakeholder is any person who benefits or is affected by your activities.
  • Could you communicate your intent to implement or improve your impact measurement and management strategy? Initially, 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 organization's area.

Creating theory of change

Actionable approach to creating a robust theory of change in the shortest time.

A theory of change describes the logical sequence of steps expected to lead 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.

Here are some steps for creating a theory of change:

  • First, please define the problem or challenge: Clearly explain the problem or challenge the organization is trying to address.
  • Identify the desired outcome or impact: Define the long-term, transformative change that the organization aims to achieve.
  • Map out the logic of change: Identify the intermediate outcomes or outputs needed to reach the desired impact. These outcomes or outputs should be specific, measurable, and achievable.
  • Identify the key activities or interventions: Identify the specific activities or interventions implemented to achieve the intermediate outcomes or outputs.
  • Determine the resources and capacity needed: Identify the resources and capacity the organization will need to implement the key activities or interventions.
  • Develop a plan for monitoring and evaluation: Establish a plan for tracking progress and measuring the effectiveness of the activities or interventions over time. This may include establishing specific metrics or indicators to measure progress and conducting regular evaluations to assess the program's effectiveness.
  • Communicate and share the theory of change: Share the theory of change with stakeholders, including funders, partners, and beneficiaries, to gain support and buy-in for the program.

Follow these steps to build robust TOC

  • Collaborate team and list TOC components
  • Go to Strategy App and create a team
  • Make sure to start with a practical problem statement, for example: 

Our theory of change would include the following elements to address the problem of low crop production and unsustainable income for farmers in South Africa due to a lack of training in climate resilience.
 
  • Define explicit activities and create a strategy map
  • Make sure to build effective metrics that align with TOC components with a clear focus on change over time (or reporting period)
  • Design data table and sources
  • Design survey (if looking for outcome)

 

Example TOC components for the above problem statements would be

Overall, our theory of change is based on the belief that is providing training and support to farmers in South Africa; we can help them to increase their crop production,
improve their income, and build resilience to climate change. This will ultimately contribute to sustainable livelihoods and food security in the region.

A practical theory of change SHOULD HAVE a strong alignment with data strategy derived from metrics and analytics goals. Unfortunately, many organizations need help to achieve their stated mission when they treat impact, data, and reporting separately

Inputs:

  •  Funding and resources for training programs and support services
  • Partnerships with local organizations and experts in climate resilience

Activities:
  • Development and implementation of climate resilience training programs for farmers
  • Provision of support services, such as counseling and legal assistance, to help farmers apply and integrate climate resilience practices into their farming operations

Outputs:
  • Trained farmers with increased knowledge and skills in climate resilience
  • Improved access to support services for farmers

Outcomes:
  • Increased crop production and income for farmers
  • Improved climate resilience and adaptive capacity of farming operations

Impact:

  • Sustainable income and improved livelihoods for farmers in South Africa
  • Increased food security and resilience to climate change impacts in the region.

Theory of Action

Do not go overboard and spend months building a theory of change. The point is to just build a theory of change with clear immediate outcomes.  Run effective impact experiments aligned to immediate outcomes.  The goal is to listen to needs of your beneficiaries.

How to use the theory of change

In the previous section, we discussed the fundamentals of the Theory of Change. Now it is time to test your theory of change. To understand our concept better, let us take a simple example. The Green Foundation is working towards breaking the cycle of poverty in America through job creation. One of the programs is skill-building classes for post-high school students from underserved communities. Let's put the Theory of Change for this Skill Building Program to the test. As your design, your theory of change in action, make sure to focus on the key message in this video.

1. Stakeholders

  • Who is benefiting from your work?
  • And why will it work?

Here stakeholders are identified as post-high school students from underserved communities in the USA. Why do you think your program is needed and will work for your stakeholders? We assume that underserved community students are most affected by the unemployment that your investment strategy or business aims to address. Do your due diligence. This is where you also have to follow existing evidence or ask your community for the gaps your program will solve by stakeholder feedback.

  • Is unemployment is one of the burning issues of your community?
  • Do they have demand for the skill training you are providing?
  • Are local companies ready to hire students after they finish their training?

2. Program Goal

  • What result are you seeking to achieve?

The goal of the Green foundation is to break the poverty cycle in the USA. Short-term goals will be the unemployment rate going down in communities they serve and other life skills. A good theory of change doesn’t simply reflect what an organization is already doing. It rather articulates what the organization wants to be held accountable for. Thus, make your goal specific and set an accountability target.

3. Duration

  • How soon will you achieve the desired results?

Define your program's time period, and how soon will you be able to see the result? It depends on how long the skill-building program is. Many variables, such as resume building, interview preparation, hiring companies aligned, skills match to the industry requirements, no other social or cultural boundaries are identified. Plan to collect and analyze year after year data to see the progress

4. Input and Activities

  • How will you achieve and demonstrate your results?

Describe the activities and resources you will allocate to address the problem and create an impact. Here identifying the students and their strengths, teaching skills, training teachers, engaging hiring companies, etc., all are key actions that you will take as part of your strategy for creating impact.


5. Context, Limitation, and Risk

  • Where and under what circumstances will you do your work?

Describe any limitations to your theory. Consider your constraints such as economic distress and low hiring by the area companies or health outbreaks such as COVID19. There could be things outside your control. Consider the risks and limitations for achieving your goals. Make a plan to avoid and work-a-round the risks.

6. Identify the key agent of change

Identify the early adopters within the different departments – the individuals who seem most excited about the potential change and want to be part of it. Next, provide those individuals with training to be well-versed in the objectives and goals and the methodologies and tools used to apply them. Throughout the process, these are the individuals you will want to keep informed and updated. They will help keep everyone else updated as well. Be sure to listen to their feedback. All this feedback will help you make small adjustments to make the change smoother.

7. Reinforcement

Recognize those making an effort to adopt the new process. Show how the benefits are starting to happen. Communicate how this new impact strategy helps your organization, either in terms of efficiency, effectiveness, or any other element relevant to your organization’s culture. Try to adapt the implementation process around the organic inclinations of those involved.

8. Invest in innovation

Well designed tools can make the process a lot simpler and easy for stakeholder engagement. Using multiple tools that are not made for impact data management can be very time-consuming and resource-draining in the long run.

9. Verify assumptions fast 

A Theory of Change (ToC) documents the change (impact) that you seek for both accountability and the internal awareness of potential organizational challenges. In the theory of change, the primary challenges indicated are your underlying assumptions. 
An assumption (no matter how strongly you believe it to be true) is, after all, an assumption. Woven into the fabric of every Theory of Change is at least one grand assumption. For example, providing free shoes improves the overall quality of life. As we saw with Toms Shoes, an assumption that is not thoroughly explored can negatively affect consequences. In this case, in-kind donations replaced local markets and hurt the economy of the community served. 
When researching the Theory of Change, you will quickly realize how complex it is. Mapping out the long-term path you intend to take to surface the hidden assumptions is no easy task. There are hundreds of different examples of Theory of change to build from, along with thoughtfully constructed templates.


10. Evaluate, Evaluate, Evaluate

Avoid being too ambitious with your first theory of change. A theory of change should be seen as a working document with year after year long-term impact learning in mind.
A theory of change must clarify what results will hold an organization accountable?

Iterate through your framework based on key assumptions.

That is why Sopact Impact Cloud® allows our clients to build Impact Strategy with Theory of Change at any stage of their Impact Measurement journey. Impact strategy and success metrics can be continuously updated to reflect learning and new situations. Continuous learning from the data takes them to meet program goals and perhaps scale social impact.

Theory of Change Diagram

 A theory of change diagram is a visual representation that illustrates the underlying assumptions and logic of a particular social intervention or program. It is often used by non-profit organizations, government agencies, and other groups to articulate their intended outcomes and demonstrate how they expect to achieve them. The diagram usually includes a series of interconnected boxes or circles that depict the intervention's inputs, activities, outputs, outcomes, and impact. By mapping out the causal relationships between these different elements, the theory of change diagram helps stakeholders understand how the intervention is supposed to work and what factors might influence its success or failure.

theory of change diagram
 

Theory of Change Illustration:

A theory of change illustration is another term for a theory of change diagram. It visually represents a particular intervention's underlying logic and assumptions. It is designed to help stakeholders understand how the intervention is expected to work and how it will produce the desired outcomes.

Theory of Action vs. Theory of Change

A theory of action and a theory of change are both used to describe the underlying logic of an intervention, but they are not the same thing. A theory of action typically focuses on the specific actions that will be taken to achieve a desired outcome. In contrast, a theory of change takes a broader perspective and seeks to explain how the actions will lead to the intended results. In other words, a theory of action is a more detailed and specific action plan, while a theory of change is a more comprehensive and strategic vision of how the change will happen.

 

Theory of Change vs. Logic Model

Although "theory of change" and "logic model" are not the same, they are often used interchangeably because they both aim to provide a systematic framework for understanding how a program or intervention is expected to achieve its intended outcomes. While a logic model provides a more specific and linear diagram of the causal relationships between a program's inputs, activities, outputs, and outcomes, a theory of change takes a more holistic approach. It seeks to explain the underlying logic and assumptions guiding the program's development.

However, it's essential to stress-test your approach using a logic model and a theory of change. While a logic model can provide a robust design for a program, using a theory of change-based approach after the logic model is developed can help ensure that the program's goals and outcomes are aligned with its broader mission and vision. This additional stress testing can improve the overall effectiveness and impact of the program.

Criteria Theory of Change Logic Model
Definition A comprehensive and visual representation of how and why a desired change is expected to happen.
A linear and visual representation of a program or project that outlines its resources, activities, outputs, and outcomes.
Function To guide program or project planning, implementation, and evaluation by identifying and testing the underlying assumptions about how change happens.
To plan, implement, and evaluate a program or project by specifying its inputs, activities, outputs, and outcomes in a structured way.
Scope Broader, more holistic, and less structured than a logic model
Narrower, more specific, and more structured than a theory of change
Assumptions Assumptions about how change happens are explicitly stated and tested through evaluation.
Assumptions about how change happens are implicit and not always tested through evaluation.
Flexibility Flexible and adaptable to different contexts, stakeholders, and levels of complexity
Less flexible and adaptable to different contexts, stakeholders, and levels of complexity
Uses Used in social impact, international development, and nonprofit sectors.
Used in project management, performance measurement, and evaluation.

 

Sopact Impact Strategy, for example, uses a logic model approach to develop its programs and interventions. However, tracking progress using key performance indicators (KPIs) that measure both key outcomes and outcome metrics is crucial to ensure that the program progresses toward its intended outcomes. By using both a logic model and a theory of change-based approach, program designers can develop more effective interventions grounded in a solid understanding of the underlying logic and assumptions driving the program.

theory of change logic model

 

 

Organizational Theory of Change

An organizational theory of change is a specific type of change that focuses on the strategies and actions an organization will take to achieve its mission and vision. It typically outlines the underlying logic and assumptions that guide an organization's work and the key outcomes and impact it hopes to achieve. An organizational theory of change is an important tool for non-profit organizations, government agencies, and other groups that want to ensure that their efforts are aligned with their goals and that they are progressing toward their desired outcomes.

KNOWLEDGE BASE

Theory of change resources

  • Learn More:

  • "The Theory of Change: A Practical Tool for Action and Evaluation" by the Annie E. Casey Foundation: https://www.aecf.org/resources/the-theory-of-change-a-practical-tool-for-action-and-evaluation/
    This article introduces the theory of change and explains how it can be used as a planning and evaluation tool to guide program design, implementation, and continuous improvement. It includes examples of how different organizations have used the theory of change approach and provides tips for creating and using a theory of change.
  • "The Theory of Change: A Primer" by the Foundation Center: https://www.foundationcenter.org/grantseekers/grantseeker-resources/theory-of-change
    This article provides a brief overview of the theory of change. It explains how it can define and articulate the assumptions, values, and logic underlying a program or intervention. It includes tips for developing and using a theory of change and links to additional resources on the topic.
  • "The Theory of Change Approach: A Practical Guide" by the Australian Council for Educational Research: https://www.acer.org/au/research/policy/theory-of-change
    This guide provides a detailed overview of the theory of change approach, including its key concepts and principles. It explains how it can design and evaluate programs and interventions. It includes step-by-step instructions for developing and using a theory of change and case studies demonstrating how the approach has been applied.
  • "The Theory of Change: A Comprehensive Guide" by the Center for the Study of Social Policy: https://cssp.org/resource/the-theory-of-change-a-comprehensive-guide/
    This comprehensive guide provides an in-depth explanation of the theory of change approach, including its history and key principles. It explains how to develop and use a theory of change to guide program design, implementation, and evaluation and includes tips and tools for working with the approach. The guide also includes case studies demonstrating how different organizations have used the theory of change approach to achieve their goals.
  • "The Theory of Change Handbook: A Guide for Design, Implementation, and Evaluation" by the Aspen Institute: https://www.aspeninstitute.org/publications/theory-of-change-handbook/
    This handbook provides a detailed guide to the theory of change approach, including its key concepts and principles. It explains how it can design, implement, and evaluate programs and interventions. It includes step-by-step instructions for developing and using a theory of change and tools and resources for working with the approach. The handbook also includes case studies demonstrating how different organizations have used the theory of change approach in practice.
  • What is the Theory of Change? (https://www.tccgroup.com/insights/what-is-theory-of-change/) - This resource provides an overview of the theory of change, including its purpose and key components.
  • Theory of Change (https://www.hki.org/resources/theory-change/) - This resource from the Harvard Family Research Project explains the theory of change, including how it can be used in program planning and evaluation.
  • What is a Theory of Change, and How Do You Develop One? (https://www.evaluation.org/resources/online-resources/e-learning/theory-of-change/) - This resource from the American Evaluation Association provides a step-by-step guide to developing a theory of change, including templates and examples.
  • "Purposeful Program Theory: The Evolution of Logic Models (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3129839/) - This article discusses the evolution of purposeful program theory and how it differs from traditional logic models.
  • Purposeful Program Theory: A Practical Guide (https://www.tccgroup.com/insights/purposeful-program-theory-practical-guide/) - This resource provides a practical guide to developing and using purposeful program theory in program planning and evaluation.
  • What is an Effective Theory? (https://plato.stanford.edu/entries/effective-theory/) - This resource from the Stanford Encyclopedia of Philosophy provides a definition and explanation of the effective theory in the context of physics and scientific research
  • The Concept of an Effective Theory (https://www.tandfonline.com/doi/abs/10.1080/00107510903106036) - This article discusses the concept of effective theory in the context of physics and its relevance to other fields.
  • Outcomes Framework (https://www.gov.uk/government/publications/outcomes-framework) - This resource from the UK government provides an overview of the outcomes framework, including its purpose and key components
  • Outcomes Frameworks: A Guide (https://www.gov.uk/government/publications/outcomes-frameworks-a-guide) - This resource from the UK government provides a detailed guide to developing and using outcomes frameworks in program planning and evaluation.
  • Change Concepts (https://www.managementstudyguide.com/change-concepts.htm) - This resource provides an overview of different change concepts in the context of organizational change management.
  • Change Concepts and Theories (https://www.businessballs.com/change-management/change-concepts-theories-models-processes-models-methods-strategies-tactics-techniques-tools/) - This resource provides a list of different change concepts, theories, and models in the context of organizational change management.
  • Implementation Science: A Synthesis of the Literature (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2957945/) - This article provides an overview of implementation theory and its key components
  • Implementation Theories (https://www.health.gov.au/internet/main/publishing
  • The following resources provide additional examples of the theory of change examples.

    The Center for Theory of Change, a nonprofit organization dedicated to promoting best practices in ToC, has created a valuable database of existing Theory of Change models from organizations worldwide.

    Here are a few direct links to some of those examples:

Theory of change FAQ

Theory of Change is a methodology used to plan, implement, and evaluate social or economic change initiatives. The following are some frequently asked questions about the Theory of Change and their answers:

Theory of change statement

A theory of change statement is a concise and clear explanation of how a program or initiative is expected to produce desired outcomes and impact. It is a written document that outlines the causal relationships between inputs, activities, outputs, outcomes, and impact. The theory of change statement is usually developed at the beginning of a program and is used to guide the program's planning, implementation, and evaluation.

A theory of change statement typically includes the following components:

  • Vision statement: A statement of the program's long-term goal or desired impact.
  • Mission statement: A statement of the program's purpose and intended outcomes.
  • Assumptions: A list of the underlying assumptions about the program's context and the factors expected to influence its success.
  • Inputs: The resources, staff, and other assets required to implement the program.
  • Activities: The specific actions that will be taken to achieve the program's goals.
  • Outputs: The immediate and measurable results of the program's activities.
  • Outcomes: The intermediate and long-term effects of the program on individuals, groups, or communities.
  • Impact: The ultimate and desired change or difference resulting from the program.

The theory of change statement is a helpful tool for program planning, implementation, and evaluation, as it provides a clear and actionable guide to achieving desired outcomes and impact. It also allows organizations to identify areas of potential improvement and track progress toward achieving their goals.

Change Theory

Change theory refers to frameworks and models that explain how individuals, groups, and organizations can initiate, plan, implement, and sustain changes. Change theory provides a systematic approach to understanding and managing change in different contexts. Change theories help organizations and individuals to understand the factors that drive change, the barriers to difference, and the most effective ways to overcome those barriers.

Change theories can be broadly categorized into four main categories:

  • Action theories: focus on the actions and processes individuals, groups, and organizations can take to initiate, plan, and implement change.
  • Developmental theories focus on the stages of change that individuals and organizations go through as they adapt to new situations.
  • Dynamic theories focus on the ongoing processes of change and how they interact with each other over time.
  • Dialectical theories: focus on the tensions and contradictions inherent in change and how they can be managed to achieve desired outcomes.
Examples of well-known change theories include Lewin's Change Management Model, Kotter's 8-Step Change Model, Action Research, Appreciative Inquiry, and Action Learning. Each of these theories provides a different perspective on change and can be used in other contexts depending on the change that needs to be implemented.

Conclusion

In conclusion, developing a Theory of Change is essential to creating impactful change. Using Sopact's SAAS-based Impact Strategy app, you can easily create a roadmap for achieving your goals and tracking progress. With access to a library of strategies, training, and examples, you have all the tools you need to create actionable change.

We encourage you to review our Theory of Change template and Theory of Change examples to get even more inspiration and guidance. These resources can help you understand the Theory of Change framework in more depth and provide practical examples to guide your impact strategy.

At Sopact, our mission is to help social impact organizations maximize their impact. Anyone can create meaningful change with the right tools and resources. So start your journey towards impact today and discover the power of Theory of Change with Sopact's Impact Strategy app.