Theory of Change

How to develop a Theory of Change for your cross-sector hub, alliance or department

When you’re setting up your multi-stakeholder collaboration unit or alliance, the right planning tools and frameworks help you to move from concept to operationalising, and to establish core elements like your mission, vision and strategy. Tools and frameworks for developing these elements include the Business Model Canvas (BMC) or Social Enterprise Business Model Canvas, Theory of Change, and numerous public sector planning frameworks. This module looks at how to develop a Theory of Change for your organisation.

Key Takeaways

A complete ToC model provides:

  • An agreement among stakeholders about what defines success and what it takes to achieve it.
  • Alignment of team members to the goal
  • Understanding of team members’ roles in achieving it.
  • A visual representation of the expected change and how it will occur.
  • A communication tool to capture the complexity of our initiative.
  • A blueprint for evaluation with measurable indicators of success.

Video Tutorials

What is Theory of Change?

Theory of Change (ToC) is a process of defining and illustrating how you’ll achieve a desired change. It’s a framework for organisational strategy that’s typically used by the non-profit sector. Put simply, a Theory of Change outlines the change that an organisation wants to see happen, and a hypothesis around what actions you need to take for that change to occur. Your ToC:

  1. Describes a process of desired change by making explicit the way we think about a current situation or problem, its underlying causes, the long-term change we seek, and what needs to happen in order for that change to come about.
  2. Is a framework for organisational strategy/work plans and measurement.
  3. Shows an organisation or program’s desired long-term goals or outcomes and the interventions that need to happen for these goals to be achieved.
  4. Is a product that contains a set of hypotheses, outcomes, assumptions and indicators that make up causal pathways of change needed to bring about a desired long-term goal.
  5. Should be a living document that is revisited every programmatic cycle to ensure that the assumptions and rationale are still relevant in light of what has been learnt and achieved.

Why Does Your Organisation Need One?

A ToC can help your cross-sector collaboration unit, alliance, platform or team to ensure its activities are bringing about the desired impact through collective action. Theory of Change is vital to the success of organisations and programs because programs and activities need to be grounded in good theory.

By developing a ToC – based on good theory – leaders can be better assured that their programs are delivering the right activities for the desired outcomes. And by creating a ToC, programs are easier to sustain, bring to scale, and evaluate, since each step – from the ideas behind it, to the outcomes it hopes to provide, to the resources needed – are clearly defined within the theory.

Theory of Change allows you to:

  1. Build a common understanding around the process needed to achieve a desired change.
  2. Make explicit how activities, outputs and outcomes will interact within the context.
  3. Use evidence to support the underlying assumptions and the links between actions and outcomes.
  4. Identify critical areas addressed by external actors and how the program will link to them.
  5. Provide a detailed map showing pathways of change – how multiple activities will lead to the achievement of short- and long-term goals.

Building a Theory of Change

The elements of a Theory of Change are:

  1. Problem Statement
  2. Desired Long-Term Goal
  3. Pathways of Change (Interventions for Each Outputs/Outcome)
  4. Stakeholder mapping
  5. Developing Assumptions and Risks
  6. Indicators for Each Output/Outcome
  7. Diagram and Narrative Summary (Strategy / Work Plans)

How to build your ToC

  1. Define the Problem: Define the problem and key underlying causes (tool such Problem Tree will be helpful)
  2. Identify long-term goal / impact (tool such Solution Tree will be helpful)
  3. Pathways of Change: define strategy for solving the problem
  4. Identify assumptions related to interventions
  5. Identify indicators for each output and outcome.

The Exercises section of this module will guide you step-by-step through creating a ToC for your department, team or organisation. A ToC should be able to be displayed on a single page with sufficient detail that it can be explained fairly easily and understood by other people. It is a one page diagram that is used to aid communication.

Much of the value of a logic model in ToC is that it provides a visual expression of our underlying beliefs about why the program is likely to succeed through one step leading to another. A ToC Diagram shows only solutions and pathways of change. It has four components at minimum: inputs, activities, outputs and outcomes.

Once you have determined your ToC, you’re on your way to creating a strategic plan for your organisation or updating your current plan to reflect this new thinking.

Our Theory of Change

We undertook a ToC exercise to develop and validate our hypothesis and pathway of change to ensure that we were truly focused on the Vision and Mission of the Hub.

We have sought to prove our hypothesis that multi-sector partnerships can be a dynamic and appropriate vehicle to:

  • wrestle complex problems
  • tackle existing problems in new ways
  • provide a frame for unconventional partners to collaborate towards a shared-value mission
  • potentially create a multiplier effect for market-driven solutions to poverty issues

This hypothesis is grounded in the core principles of partnering: there must be mutual benefit, transparency and trust, and equity across all partners.

This proved to be a useful exercise to ensure the team had clarity on the direction and the scope. It built a common understanding among the team around the process and activities needed to achieve the desired change. It is a living document that is to be revisited at an agreed interval. Indeed, we significantly revised our second ToC from the first (developed in our first year) at the beginning of our third year.

Here’s what our first Theory of Change looked like:

Our current Theory of Change diagram is below:

Other ToC Examples

Don’t get too hung up on what your ToC looks like. A ToC can be illustrated in all shapes – here are just a few examples of ToCs, and you can do a quick image search for ToC to see how many different forms they take. You are free to create your own.

What they all have in common is that they depict logical links between the different levels, namely:

Activities lead to → outputs which lead to → outcome that leads to → impact.


Thomson Reuters Foundation

Grow Asia


The exercises for this module comprise a step-by-step guide to developing your own Theory of Change for your multi-stakeholder partnership hub.

Exercise 1: Identify a Problem

  1. Identify a problem that you are passionate about or a real one at your workplace that you want solved.
  2. Write your problem statement in one sentence on a flashcard.

- a condition or broad set of conditions that affects people in a negative way (e.g., poverty, low agri production, human trafficking).

Exercise 2: Define your Problem Statement

  1. Identify the underlying causes of the problem
  2. Recraft your problem statement based on the below:
    • What is the problem we are trying to solve?
    • a condition or broad set of conditions that affects people in a negative way (e.g., poverty, low agri production, human trafficking).
    • Why does the problem exist?
    • Three underlying causes – Why (primary), Why (secondary) Why (tertiary)
    • Who are affected [target population / beneficiaries]? (youth, women, street children, rich farmers, primary school students)
    • Where - state the area or location of the population

Developing a Problem Tree can be a useful tool to better understand the ‘root’ causes, effects and the core of your identified problem and define your problem statement.

Exercise 3: Identify Solutions

  1. Decide on the change you want to see, namely a desired long-term goal. This goal specifies the kind of enduring impact you would like to see achieved in the lives of the target population / beneficiaries.
  2. Write your desired long-term goal (impact) in one sentence

Exercise 4: Map a Pathway of Change (the missing middle)

Identify a series of major conditions/outcomes and related incremental changes that are needed in order to reach the desired long-term goal.

  • Inputs – resources and enablers for activities to happen
  • Activities – numerous activities contribute to the output
  • Outputs – numerous outputs contribute to the outcome
  • Outcomes - numerous outcomes contribute to the long-term goal
  • The change pathways show the outcome or condition that must be realized before the next higher outcome in the chain can be achieved.
  • This logic helps us to:
    1. prioritize the outcomes and actions linked to each outcome
    2. eliminate outcomes that may be desired but are unnecessary to achieve the goal.
  • Refer to the root causes, define activities that will address those root causes.
  • Activities should be based on evidence base, best practices, lessons learned, evaluation reports, community inputs, research and institutional experience. This provides opportunity to innovate solutions.
  • The top level WHY is your outcome, the second is outputs and third is activities.
  • It is not a linear process. As you work on your activities, you may realise you need to go back and check your inputs; one you work on your outcome, you may want to go back to outputs to confirm if they will lead to your outcome.

Exercise 5: Map stakeholders

Write down the people who you hope to help with your work – this could be:

  1. individuals
  2. a small community group
  3. a large organization
  4. central or local government departments
  5. small or large businesses
  6. Academia.

This may seem like a simple task, but a proper stakeholder analysis will be based on a Stakeholder power-interest matrix and their level of involvement and influence.


Also think about who else is working the field. Are there opportunities for cooperation and partnerships? Is there likely to be competition with others?

Exercise 6: Assumptions …‘if’…‘then’…

Pathways of Change are hypothetical – based on assumptions.

  1. Identify assumptions for activities, outputs and outcomes. Assumptions are conditions that are important to the success of a project, but are beyond its control
  2. Use available evidence to support these assumptions

If the assumptions are within the project control, the project should include activities to address those assumptions. Some assumptions may be less proven and will need to be tested and documented, or challenged.

Let’s look at some examples of assumptions:

  1. IF different sectors are willing, THEN they are likely to be able to work together to develop products/services for the BoP.
  2. IF they are aware of market opportunities and IF there is an enabling environment for business, THEN businesses will likely enter the BoP market.

Exercise 7: Indicators and measurement

Indicators tell us how success will be recognized at each step (intermediate outcome) in the pathway of change.

  1. Define indicators for each output/outcome on the pathway of change. How will you know you are successful?
  2. Make sure your indicators are ‘SMART’ (specific, measurable, achievable, relevant, and time-bound)
  3. For each indicator, consider how you are going to measure these indicators. Questions to consider are: what data needs to be collected, how often is the data to be collected, who is responsible for collecting and analysing the data, how the data will be documented and stored.

(You can see more on Performance Measurement here).

Exercise 8: construct your own Theory of Change

  1. Build your own, one-page Theory of Change diagram to demonstrate how the selected problem will be solved.


Here are some key resources for Theory of Change. Our downloadable Hub-in-a-Box guide also includes useful and relevant tools. And we’ve compiled additional tools and resources, that Asia P3 Hub has found the most useful in its journey so far on the resources section of the asia p3 hub website.