A Theory of Change – also known as impact rationale – describes the rationale behind how an organization pursues societal value creation. It is a way of visualization and logical thinking about how context, inputs, activities, outputs and outcomes of an organization work together to produce the ultimate impacts it pursues. It involves a mindset of continuous learning, with a critical and questioning attitude about what works and why or why not. It is a constantly evolving view of reality that is shaped together with stakeholders. A Theory of Change offers social organizations a powerful basis for communication and stakeholder engagement.

What is a Theory of Change?

A Theory of Change (ToC) describes a group’s current understanding of the existing and latent change processes within a social system on a certain social issue. It shows how change processes push the system in a certain direction. It shows the position of an organization in this and why what that organization does, contributes to changing the social system for the positive and therefore creates impact.

A ToC thus shows the rationale of why the organization’s strategies are or aren’t successful in realizing change and impact. A ToC is therefore also referred to as an organization’s ‘impact rationale’: the rationale or logic behind how the organization produces social impact.

• A ToC explains the dynamics within a social system by organizing outcomes, actions, inputs and outputs into pathways that lead to change. These pathways explain relationships and interplay within the social system.
• A ToC incorporates an ecosystem of actors: other actors than the organization also affect the social issue and an organization generally is not able to produce system-wide change on its own.
• A good ToC is grounded in the local context. The influence of the context on the change processes is an essential dimension of a ToC. Legislation and local cultural characteristics for example may enable or inhibit certain change processes and the way certain actions work out.
• The phrase ‘organization’ can refer to a company, NGO, program, project, joint-venture, policy, business unit, sector, etc. It depends on whose ToC you’re developing.

The heart and mind of social organisations

A ToC is the heart and mind of a social organization. It includes the vision of the sustainable future that an organization wishes to bring about and works towards (often referred to as ‘vision of success’). But a ToC goes beyond marketing and branding messages. It explains the rationale of how the organization works towards this vision. In fact, Changeroo goes even a step further and links this rationale to six strategic themes that allow one to zoom in further, for example on the progress being made, the challenges the organization faces and the innovations implemented.

ToC thinking: A mindset of ongoing learning, critical questioning and co-creation

‘ToC thinking’ refers to the process or, perhaps better formulated, the mindset underlying the development of a ToC. It represents an always ongoing learning process, together with stakeholders and with a critical and questioning attitude about what works and why or why not. This requires the ability to question oneself, dealing with uncertainties, communication skills, problem solving skills, non-linear and complexity thinking, ability to acknowledge a diversity of perspectives, etc.

ToC thinking is arguably of even greater value than the resulting product (a diagram and/or textual narrative with underlying analyses). Changeroo seeks to support such a process facilitating the input from stakeholders and adaptations in the ToC.

Communication and stakeholder engagement tool

Basis of communication

For social organizations for which societal impact is at the essence of their mission, your ToC is the perfect basis for communication for multiple reasons:

1. Combining logic, visualization and stakeholder engagement to explain the rationale behind how an organization creates impact, a ToC is very powerful and persuasive.
2. Your ToC is at the heart of your strategy and therefore perfectly positioned to explain the different strategic issues your organization experiences and how these relate to your ability to generate impact. Indeed, issues are strategic because of their effect on your ToC. It is these issues and their effects that strategy discussions are about. Changeroo facilitates the conversation about strategic issues and how they relate to your ToC through wikipages focused on consensus, integration of information and objective facts.
3. Your ToC is at the core of your organization’s reason of existence. It fuels enthusiasm by combining the heart of your vision for the world with the mind of the rationale how to realize this vision.
4. A ToC offers stakeholders a quick persuasive overview of your impact rationale, and combines such with the ability to systemically zoom in on the strategic issues at play and more in-depth knowledge. Indeed, stakeholders – including investors, grant makers, civil society, media, customers, etc. – often don’t immediately want to read lengthy impact or sustainability reports. A ToC communicates the big picture and gets them excited and convinced about the vision and rationale, after which stakeholders can choose to selectively zoom in on the strategic issues they want to learn more about.

Visualization

The saying that a picture says more than a thousand words holds true of a ToC; it generally uses visualization. This is advantageous as many stakeholders are not inclined to read lengthy impact or sustainability reports.

Visualizing your ToC can create a powerful image that provides a shared and focused ‘road-map’ towards the desired impact, generates buy-in from stakeholders about what should be done and who does what, as well as provide a framework for monitoring, evaluation and learning. Just as it helps understand why an organization is successful it also helps understand if and why something does not generate the desired impacts. It helps you to learn and move forward to more effective strategies.

Constantly evolving co-creation with stakeholders

A ToC is a constantly evolving view of reality that is shaped together with stakeholders. Stakeholders are an indispensable source of perspectives, knowledge, resources and experiences to develop a thorough understanding of change processes and an organization’s impact on society.

But how can you constantly engage stakeholders in this process? And how do you use your ToC as a basis to communicate your organization’s impact rationale? This is where Changeroo helps.

Stakeholders and Theory of Change

Separate the wheat from the chaff

From marketing and branding messages it’s difficult to separate the wheat from the chaff. Does an organization have a well-thought-through vision and does it deliver impact? Where can you as a stakeholder contribute with your expertise and resources? And where do opportunities to contribute align with your own values as stakeholder? Changeroo is meant to answer such questions and to provide a basis for your decision-making as a stakeholder, without immediately having to read long (impact or sustainability) reports to get to the essence.

Organizations committed to societal value creation – such as social enterprises, NGOs and other businesses working on impact, CSR and sustainability – present their ToC. You not only get immediate insight in the rationale behind an organization’s approach but also its progress and the challenges and needs it faces. You thus get quick insight into an organization’s impact rationale and whether the vision is well thought through and actually delivers impact.

Together toward more meaning and impact

ToC’s may thus convince and inspire stakeholders to contribute to organizations’ societal significance with their expertise and resources. As a stakeholder you could provide new ideas, support where possible, provide variation in perspectives on the issues involved, avoid blind spots within the organization, and thus increase their chances of success.

You can provide an organization’s ToC with commentary through Changeroo. The setup is focused on consensus, integration of information and objective facts, instead of repetitions and endless texts. The organization presents its needs and challenges, the assumptions and evidence underlying its ToC, reports on its progress, as well as provides other information that presents you with opportunities to contribute and help transform the organization to greater societal meaningfulness and impact.

As a result, a Changeroo account is a constantly evolving co-creation between an organization and its stakeholders, which results into a Wiki Report on the societal value creation by a business, NGO or project.

Research on Theory of Change

Theory of Change has its origins in the development sector and much of the research originates from there:

Theory of Change Thinking in Practice: A stepwise approach Authors: Marjan van Es, Irene Guijt and Isabel Vogel	Interrogating the Theory of Change: Evaluating impact investing where it matters most Author: Edward T. Jackson, Journal of Sustainable Finance & Investment	Comic Relief: Theory of Change review Author: Cathy James	Theories of Change: Time for a radical approach to learning in development Author: Craig Valters
Creating your theory of change: NPC’s practical guide Authors: Ellen Harries, James Noble and Lindsay Hodgson	Review of the use of ‘Theory of Change’ in international development Author: Isabel Vogel for the UK Department of International Development	Webinar on Theory of Change Author: ActKnowledge	Learning from use of participatory action research and theory of change in the CGIAR Research Program on Aquatic Agricultural Systems Authors: J. Marina Apgar et al., Action Research