Theory of Change (Impact Chain) (TOC) framework is widely used in the field of social impact to map out how and why change happens. It is available in complementary tools such as templates, guides and more.

It relates how the day-to-day activities of an organization come together to achieve their impact goals. This is a key step in deciding what you will need to measure to evidence your social impact. It's a comprehensive approach that helps organizations understand the pathways of change they aim to create, articulate their assumptions, and design strategies to achieve their desired outcomes.

Watch a 2.5 min intro video produced by the Social Investment Business and the Good Analyst.

Purpose

The Theory of change is useful for deciding what exactly should be monitored and measured in an organization to report back on concrete outcomes and impact.

For whom?

The framework is suitable for a wide range of social impact organizations, including startups of all stages, nonprofits, NGOs, government agencies, and philanthropic foundations. It's particularly valuable for organizations that:

• Seek to create meaningful and sustainable social change.
• Want to clarify their goals, strategies, and underlying assumptions.
• Need to communicate their approach and impact to stakeholders, donors, and beneficiaries.
• Wish to improve program planning, implementation, and evaluation processes.

When to use it?

The Theory of Change is typically used at various stages throughout the lifecycle of a social impact initiative or organization. It is also important to come back to it for evaluation and reflection on a regular basis.

Hereby, some key moments to apply the framework:

• Program Design: Organizations often use TOC during the initial design phase of a program or initiative. It helps them clarify their goals, articulate their intended outcomes, and identify the pathways of change they aim to facilitate. By mapping out these elements, organizations can develop more effective strategies and interventions.
• Grant/Investment Proposal Development: When seeking funding or support for a project, startups, nonprofits and NGOs may use TOC to strengthen their grant proposals. By presenting a clear and logical framework for how their activities will lead to desired outcomes, organizations can demonstrate their understanding of the problem and their capacity to address it.
• Strategic Planning: TOC can be a valuable tool in strategic planning processes, helping organizations align their mission, vision, and objectives with concrete plans for action. By grounding strategic decisions in a theory of change, organizations can ensure that their resources are directed toward activities that are most likely to generate meaningful impact.
• Implementation and Monitoring: During the implementation phase of a program, TOC provides a roadmap for monitoring progress and making course corrections as needed. By tracking indicators and evaluating outcomes theexpected pathway of change, organizations can learn from their experiences and adapt their strategies in real-time.
• Evaluation and Learning: After a project has been implemented, TOC can inform evaluation efforts aimed at assessing its effectiveness and impact. By comparing actual outcomes to those predicted in the theory of change, organizations can identify successes, challenges, and areas for improvement. This learning can then be used to refine future programs and initiative.