A Theory of Change (ToC) is a powerful tool that helps organisations and initiatives plan how they will create change, assess their effectiveness and communicate to stakeholders. Growing in popularity over the last decade, it is now used widely by charities, social enterprises, the public sector and gradually even by mainstream businesses who are recognising its potential.
A ToC is normally depicted as a map, or a journey, linking the activities of a programme, intervention or organisation to the short-term, medium-term and long-term outcomes experienced by stakeholders. It is a living diagram and narrative that should be updated as the work of the organisation changes.
Using qualitative approaches to gain an intimate understanding of how an intervention impacts on the lives of those affected leads to better quantitative analysis and modelling at later stages of an SROI analysis. Before you can start to value, you need data on outcomes; and before you collect data on outcomes, you need to make sure you are measuring the appropriate outcomes. A strong Theory of Change helps make SROI modelling easier, communicating potential impact considerations such as deadweight and attribution.