As a charity or funder what’s the first step you take when planning a new area of work, or thinking about how to measure your impact? A charity might say it is finding the staff, resources and funding to get that new service off the ground; perhaps a funder would start to look at the charities they have worked with in the past. But when clients approach us at NPC to help them with strategy or impact measurement, one of the first questions we ask is ‘do you have a theory of change?’
A few years 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. But what is a theory of change, and why is it so valuable?
A theory of change shows a charity or funder’s coherent path from needs to activities to outcomes to impact. It describes the change a charity or funder ultimately wants to make – a big ambitious goal like alleviating poverty or improving young people’s life chances – and sets out the steps involved in making that happen.
For example, you may be a funder aiming to improve young people’s life chances through education. In this case a theory of change would help you think about the different stages involved in achieving that goal, and provide a clear plan of action. Say you fund a charity that provides breakfast for disadvantaged schoolchildren – you need evidence that this charity providing breakfast leads to better concentration in school, which in turns leads to better educational attainment, which in turn leads to better job prospects. By doing this you can prove at each stage that what you’re doing (or funding others to do) is making a difference and contributing to your big overall aim.
Charities work incredibly hard, so it is no surprise that they can sometimes be so focused on their day to-day activities that they lose sight of what they are trying to achieve. When they do try to think about their goals or try to measure their impact, they can struggle. A theory of change can help charities and funders to refocus, weigh up their priorities and begin to measure their impact, ultimately getting more out of their resources to help more people.
The value lies as much in the process as in the result itself. When we’ve brought people together in workshops and taken them through their own theory of change we find that there are many different views on what works which can be argued out by stakeholders – both those working on the ground and those with a more strategic position. By doing this, everyone comes away feeling that they understand what they are trying to achieve and that they have real ownership of that vision and plan.
Trustees should also be involved when it comes to working through a theory of change. We find many trustees often like it as it provides a framework for thinking about some big issues such as whether to merge or how best to achieve their charity’s mission. When leading mental health charity Mind did a theory of change it influenced its strategic plan and funders found it much easier to understand the charity’s overall goal and what was needed to achieve it.
Of course, the world that charities work in is complex, messy and impossible to reflect comprehensively in one diagram. But this approach forces people to take a clear, simple view, crystallising their work into as few steps as possible to capture key aspects. If done well it can give a clear idea of how interventions, or the funding of an intervention, will work when grounded in the day-to-day activities. It will also highlight areas where there is good evidence of impact and flag-up any issues. We believe this approach will enable organisations to gather evidence that is useful for seeing if their intervention is working, and if not, then how they can improve it.
It’s still early days but we believe theory of change will become a vital first step for charities and funders wanting to make a difference.
To find out more, take a look at NPC’s report Theory of change: the beginning of making a difference, which is available to download from http://www.philanthropycapital.org.
Angela Kail is a senior consultant at New Philanthropy Capital and author of the Theory of Change report