What Is Theory of Change?

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What Is Theory Of Change?



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Something NGOs and impact investors alike still struggle a lot with is how to manage and measure impact. As organizations mature, though, they begin to set impact goals, they seek ways to articulate and test the main assumptions underlying their initiatives.

As we mentioned in a previous post, there are different methods and structures to accomplish such objectives. A popular and enduring framework is the Theory of Change, and it will be the focus of today’s post.


What is Theory of Change?

Theory of Change (TOC) is a method for planning, participation, and evaluation used to promote social change in organizations.

Created at the Aspen Institute Roundtable on Community Change in the 1990s and popularized by Carol Weiss, the term TOC outlines a series of desired and actual outcomes and linked rationales—all of which flow in chronological order.

The process of TOC lies in two key points: First, it differentiates between actual and desired outcomes. Second, because it requires all stakeholders to model the desired outcomes before acting to follow through to achieve it.


Steps for the Process of Theory of Change

According to the Center for Theory of Change, the process to promote theory of change (TOC) has six overall steps

  1. Identify long-term goals, who are the stakeholders, and how they will be impacted.
  2. In mini-steps, map and connect backwards the requirements to achieve the goals, and explain why these conditions are necessary and sufficient to measure success.
  3. Identify the basic assumptions that define the context of the organization as well as the risks from those assumptions.
  4. Identify all the interventions which the initiative will carry out to create the desired change.
  5. Develop indicators to adequately measure the outcomes that track performance of the  initiative.
  6. Last but not least, write a narrative to explain the logic of your initiative or draw a flowchart to make it visually clear.
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To put it more simply, the process of TOC starts from the impact, and goes backward from outcomes to inputs, as we explain below:

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  1. (Desired) Impact: Systemic change one expects to happen in the long time horizon. Naturally, it takes a while to monitor and guarantee results.
  2. Outcomes: The broader benefits one defines to achieve for the project or organization, all of which should be viewed from short-, mid-, and long-term perspectives.
  3. Outputs: The immediate results, basically positive feedback to reinforce the outcomes.
  4. Activities: it is important to think about all the activities that will enable the organization to achieve the desired outputs. 
  5. Inputs: Last but not least, in this step one should answer the question “Which resources and investments should be allocated to perform the activities described?”

Benefits and Requisites for Using Theory of Change

One of the advantages of using TOC is that it can be employed at any stage of an initiative to ensure activities are aligned with goals and at all levels of scope of work (from the smallest project to the largest programs).

Another benefit of using TOC is that it leads to a clearer planning and evaluation process, given it is all linked in small steps, enabling organizations to measure progress towards the long-term goals that goes well beyond the identification of short-term outputs. Besides, the small steps should be kept simple.

Last, it is paramount that the TOC be aligned with the organization’s overall mission statement, as well as that the organization communicate clearly with impacted stakeholders to guarantee follow-through.


Example of Theory of Change

To effectively understand TOC, we’d like to share an example from one of our customers, Color Me Empowered (CME).

CME has the mission “Provide programming that empowers children and communities through visual arts education and the implementation of civic art.”

When CME engaged Corecentra to provide software and training for their organization, we worked with CME to define the goals for the project and determined three key objectives: i) quickly pull data from across the organization in real-time; ii) help CME become transparent with its data; and iii) analyze performance to determine the true impact of CME’s activities.

From there, we defined the outcomes: Standardized control of projects, increased efficiency of operations, and the ability to measure project success.

Next step was to define the outputs: Save at least $2,000 per year and increase productivity by 15%.

We then defined the activities required to make the outputs a reality: first, consolidate data in a system to manage a variety of projects seamlessly; secondly, define and track metrics to gain insight into impacts; and third, automate time-consuming workflows.

Last but not least, we needed to define the necessary inputs and resources allocated to get the project started: thorough training from Corecentra, sufficient time to collect data from our projects and partners, and careful deliberation of what CME’s goals should be and the metrics they needed to track.


Conclusion

We hope this post has helped articulate the importance of a well-executed theory of change process.

Remote Work and Data Standardization: Why the Social Sector Cannot WaitCheckout 

If you’re interested in learning more about best practices in data standardization for organizations in your sector, please feel free to reach out to Anish Nagar (anish.nagar@corecentra.com). Anish is the CEO of Corecentra Solutions, a software company providing purpose-built digital solutions for socially conscious and outcomes-focused companies, foundations, nonprofits, and frontline government agencies.

About Corecentra


Corecentra provides advanced digital tools for organizations to manage, monitor, and report their social performance and impact. We help socially-conscious companies, impact investors, foundations, nonprofits, and frontline government agencies manage portfolios and programs, aggregate and analyze data, and easily report outcomes to key stakeholders. By seamlessly integrating program management, budgeting & finance, stakeholder engagement, predictive analytics, and impact assessment, our products empower organizations to increase their social impact and deliver a quantified view of social performance to investors, donors, beneficiaries, employees, and communities.