Theory of Change is hot. White hot.

My nonprofit clients have told me that potential funders have asked to see their Theory of Change, discuss their Theory of Change, review their Theory of Change…

What is a Theory of Change? And why does it matter?

I’ve found that there are as many explanations of Theory of Change (TOC) as there are nonprofits trying to develop one. OK, maybe not quite that many. But a lot. Enough that people feel intimidated by the process, which really is not necessary. I encourage clients not to get too caught up in the semantics, the jargon that surrounds TOC. Instead, focus on the spirit of the idea, and what it is trying to accomplish.

According to the Center for Theory of Change:

Theory of Change is essentially a comprehensive description and illustration of how and why a desired change is expected to happen in a particular context. It is focused in particular on mapping out or “filling in” what has been described as the “missing middle” between what a program or change initiative does (its activities or interventions) and how these lead to desired goals being achieved. It does this by first identifying the desired long-term goals and then works back from these to identify all the conditions (outcomes) that must be in place (and how these related to one another causally) for the goals to occur.

The long-term goal is not about the work that you want to carry out. It’s about the change that you want to create.

Basically, you begin with the end in mind – your long-term goal – and you work backwards to figure out how you are going to get there. This includes thinking about the context or environment in which your work will take place, the resources you’ll need to get where you are going, and how you’ll know when you get there, i.e. measuring your results.

This is important: The long-term goal is not about the work that you want to carry out. It’s about the change that you want to create. It answers the question, “How will the world be different because you’ve done your thing?”

A TOC should be aspirational, but it also gets down to brass tacks. Bridgespan Group says that:

Nonprofit organizations’ mission and vision statements are often too broad or aspirational to enable clear decision making regarding resource allocation and trade-offs. Intended impact and theory of change fill this gap by defining clear, specific goals and showing how the organization’s efforts will create this social change. This allows a nonprofit to make strategic decisions about how to use its time, talent and dollars to generate the maximum social returns.

I recently worked with a small nonprofit to help them develop a preliminary Theory of Change. Why “preliminary”? A TOC can be a huge undertaking. It can involve interviews with stakeholders, extensive background research, multiple drafts, votes by the Board of Directors, and more. It can cost tens of thousands of dollars and take many months to complete. For some organizations, with smaller budgets and only a couple of staff people, something that huge just isn’t right-sized for them. For this small nonprofit, we undertook an intensive, time-limited process that resulted in a preliminary draft of the TOC. The nonprofit can then take the TOC to stakeholders, partners, lay leaders and others for feedback. After that, the organization can refine and finalize their TOC as needed.

In working with this and other organizations on their Theory of Change, I’ve observed the following:

  • Organizations often need an “outsider” to come in and take an objective look at their activities, expectations, and goals. Things that intuitively make sense to an insider (staff or lay leader) may raise alarms, or simply prompt questions, from an outsider.
  • The work isn’t the goal. For example, a job training and placement program might say that training 50 individuals for high tech jobs is the goal. That’s the activity, the work of the organization. The goal might be to lift families out of poverty.
  • Don’t make yourself accountable for deliverables or goals that aren’t actually the work that you do. For example, a job training organization might be asked to report on how many of their trainees obtain and retain jobs. But if job placement isn’t something that the organization does, it cannot be expected to be held accountable (by their board, or by funders) for that outcome.
  • Don’t be afraid of The Big Idea. In fact, the development of the Theory of Change is the place to have The Big Idea! The beauty of the TOC process is that you have to articulate the conditions and resources that must be in place, and the activities that must be carried out, in order to make The Big Idea (a new, highly-aspirational goal) happen. As you go through the TOC process, it will become obvious if The Big Idea is achievable or not. If it isn’t achievable, you move on from it. If it is achievable, the TOC process helps you figure out how you will get there.
  • Your Theory of Change will have your back. Need to allocate funds in a different direction? Hire additional staff? Stop running a program that isn’t achieving results? The TOC will provide you with the justification to make these and other tough decisions.

Creating a Theory of Change might seem like a daunting undertaking. It can be. But it doesn’t have to take over your organization’s life. Start small. Find a facilitator that can ask tough, probing questions. Carve out the time – even a few days – to begin to focus on long-term goals, and you can create a valuable road map that will guide your decision making and help you put resources to their best use.

Need more ideas, resources, and insights? Find free tips HERE, and read other reflections on nonprofits and fundraising work HERE.