How to create and share your Theory of Change

Author: Bruce Dewar

My presentation on impact measurement at the Companies and Causes Canada Conference lead to an in-depth conversation on Theories of Change. More specifically, people wanted to learn how to develop a Theory of Change for their social purpose organization and then use it to demonstrate their social impact.

Developing a Theory of Change
A Theory of Change is a description of how an organization delivers a particular result, impact or change. It articulates your end goal, along with the road map to achieve that goal. To develop a Theory of Change, you first identify your ultimate goal; the big picture change you want to create. You then outline long-term outcomes that help you achieve that ultimate goal, and work backwards from there to identify the activities or interventions that will lead to those outcomes. This outcomes-based approach will help to outline the precise link between your organization’s activities and how they contribute to achieving your long-term goals.

Innoweave is a great resource to help social purpose organizations develop a Theory of Change. Innoweave provides webinars, workshops, coaching, and other tools to lead organizations through a comprehensive process to understand, improve and enhance their social impact. Developing a Theory of Change is an integral part of this process.

Furniture Bank, one of the organizations in LIFT’s social purpose portfolio, developed its Theory of Change with Innoweave:

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As you can see, this Theory of Change does a great job of illustrating how Furniture Bank collects used furniture to offer job training, provide employment opportunities, and enable displaced families to create comfortable, dignified homes. These activities, in turn, empower people to better participate in and contribute to their communities.

Using your Theory of Change
Once you understand your Theory of Change, you will be better positioned to measure and share your impact. Focus on your ultimate goal and ask yourself, “How is the world different because of my organization’s work?” This is the starting point for an efficient measurement system; you can only identify your measures of success once you have determined your outcomes or results. From here, you can identify the indicators that will best measure progress toward your desired outcomes. Be sure to incorporate short-term, mid-range and long-term milestones toward your long-term outcomes.

Many organizations measure their outputs; that is, activities they’ve completed. The more sophisticated organizations report on outcomes; that is, changes in capacity, behavior and conditions that will lead to their ultimate goal. By using your Theory of Change to develop a robust measurement system, you can ensure your organization provides meaningful impact reports for your stakeholders. More importantly, you can regularly assess how your activities are contributing to your end-goal and adjust your course accordingly.

A strong Theory of Change also plays a critical strategic role within your organization. It is an effective tool to help you make strategic decisions about what you will undertake to achieve your goals. And, as importantly, it will help you identify what you won’t do. You should share your Theory of Change with your entire team and refer to it regularly in all of your strategic decision-making.

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