Theory of change describes the change you want to make and the steps involved in making that change happen. It also captures the assumptions behind your reasoning, and where possible, provides evidence to back them up. It is enormously helpful as a tool for both strategy and evaluation—and yet most funders do not use it.
Without the kind of strategic thinking it encourages, our concern is that funders could be missing opportunities to identify neglected issues and join up funding with others.
Theories of change are not for all funders; and the benefits will differ depending on how far a funder is able to go in completing one. Some funders are able to draw out a full theory of change, whereas others are only able to do a partial theory of change.
This report talks through three different types of theories of change, each relating to one type of funder impact:
- a theory of change for impact on beneficiaries;
- a theory of change for impact on grantees; and
- a theory of change for impact on a social problem.
For each theory of change, the report discusses the associated benefits, how the theory of change should be used, and what types of funder it is useful for.
More guides on theory of change
A theory of change is a tool that allows you to describe the need you are trying to address, the changes you want to make (your outcomes), and what you plan to do (your activities). It can help you improve your strategy, measurement, communication and partnership working.
A decade ago, the term ‘theory of change’ meant little to the UK charity sector. Seen as a piece of American evaluation jargon, it did not conjure up much enthusiasm. But today, more and more charities are using theories of change, and more and more funders are asking to see them. So what is a theory of change, and why is it so valuable?
We think that, applied well, theory of change can support charities and funders to take a systemic approach to their work. This report identifies five common pitfalls that organisations fall into when using theory of change, and walks through five rules of thumb that will help organisations to use the approach to tackle complex problems.