Key Term

What is Theory Of Change?

Definition

A Theory of Change is a comprehensive description and illustration of how and why a desired change is expected to happen in a particular context. In charitable giving, it is a strategic planning tool that explains the logical sequence of activities, outputs, and outcomes that lead to a nonprofit's intended impact. It maps out the causal relationships between a program's activities and its long-term goals, showing the pathway from inputs to ultimate social change.

Significance

Understanding a nonprofit's Theory of Change is crucial for donors and foundations making informed giving decisions. It helps evaluate whether an organization's approach is logical, evidence-based, and likely to achieve its stated goals. Donors can use this framework to assess the potential impact of their charitable contributions and ensure alignment between their giving objectives and an organization's strategy. A well-articulated Theory of Change also enables more effective measurement of outcomes and impact, helping donors track the real-world results of their philanthropic investments.