Theory of Change is a cause-effect relation mechanism used to connect the dots between the intended outcome and actions taken. A simple example would be improving public transport to attract foreign direct investment. At first look, they seem largely unrelated but if we connect points it seems like a reasonable step toward the intended outcome.
- Better public transport helps industries attract talent from far-off areas in the city.
- Increased public access to industrial areas results in more and cheaper employment.
- This makes cheaper industrial areas and outskirts of city/town a viable business location.
- Thus, making it a good ground to attract investors both foreign and domestic markets.
This is one scenario that defines how our intended outcome resulted from the initiative. In reality, the theory of change models are more complicated. They take into account all the possible scenarios (good or bad) and highlight all possible assumptions taken and prerequisites needed for us to achieve the objective.
For example, what if increased public accessibility to employment increases competition and lowers payscale? In the absence of enough land/infrastructure in the industrial areas and outskirts new companies might not be attracted thus, there will be more competition for existing jobs and no social or economic benefit from our investment.
This immense complexity in defining and implementing Theory of Change models requires us to use specialized tools to backup our thought process and result in a working model. Today, software like ImpactCloud are not just able to build Theory of Change models but also connect them to Impact Metrics hence, resulting in a 360-degree view of the planned action to the intended goal.
In this article, we will see how Impact Cloud® helps at different stages of Theory of Change implementation all the while exploring the model in further detail. Let’s dive in.
To start with building a TOC model you can refer step by step guidance in Actionable Impact Management Guidebook Volume One: Groundwork
Each step works as guideline and should be executed in the order suggested. Skipping steps can result in inconsistencies in the social impact measurement strategy you are designing. You can also use the templates provided in this Guidebook.
Read More: 5 Ways to Improve Your Non-Profit TOC Model
How Does Theory Of Change Software Work?
Impact Cloud provides a unique theory of change wizard that starts with impact strategy and ends with impact reporting, and facilitates the improvement of outcomes in an iterative way. The TOC Wizard is an innovative product designed to build a strategy for
A step-by-step wizard helps build an Integrated Impact Statement, Impact Map, Global/Customer Indicators and Strategy aligned with an organizational Impact Thesis.
Starting With Impact Statement
Impact Statement is a foundational impact principle for organization, program or project. We recommend creating a precise "impact thesis."
Where do you start?
- Define your mission
- Define your vision
- How to define mission and vision?
The groundwork eBook gives you a step by step process to create mission & vision. Click below e-book guide to create your Mission & Vision.
As you create theory of change (TOC) Wizard, your first step will be to define an Impact Statement as follows.
Impact & Outcome Mapping - Theory Of Change Map
As you define a detailed theory of change, you will need to define a complete impact map. Impact Map in Impact Cloud guides you through the following steps. As you create an impact map you can link between each area:
- Impact
- Outcome
- Output
- Activity
- Input
Theory Of Change Diagram
The key steps for theory of change diagrams are
- Aligning impact map or theory of change map
- Aligning impact indicators
- Aligning with risk, assumptions and other documentation
- Aligning with the Sustainable Development Goals
Align Data Strategy with Theory Of Change
Perhaps the most important and innovative aspect of building impact strategy in these ways is that you can instantaneously align your current data with a theory of change.
With this approach:
- Metrics can aligned using formulas with all data sources
- Data collection gaps can be easily uncovered
- The best strategy for input, output and outcome-related data can be identified
The following steps indicate how you can align with any of your external or internal data. These data are collected in Project Portfolio. Data can be in the form of data from outside sources, internal data in Impact Cloud, third party surveys or Impact Cloud surveys for measuring outcomes.
The best part is that users can preview all the results as soon as they link them using a formula.
Demonstrate impact in a consistent way
Impact Scorecard Aligned Towards Stakeholder Reporting
Effective impact reporting requires an alignment between the funders and investees/grantees. It is important to agree on the following key elements which allow funders to understand impact results which align with their own internal reporting.
There are are many key reporting elements to consider:
- Sustainable Development Goals vs Custom Goals
- Sustainable Development Goals, Targets
- Indicators such as IRIS, GRI and Custom
- Reporting Period
- Performance Change
- Baseline
- Target
Build a powerful theory of change based on wizard driven process with a complete strategy.
Benefits of Impact Cloud Free Impact Strategy Application are:
- Public Impact Knowledge
- Impact Themes
- Impact Surveys
- Theory Of Change
- Impact Metrics
- SDG Alignment
- Alignment with standards
- Qualitative and Quantitative Impact Metrics
- Language
- Data Strategy
