Clarifying precisely what an organization will hold itself accountable for achieving, and how it will accomplish it, is essential for organizational growth.
An intended impact is a statement or series of statements about what specifically the organization is trying to achieve and will hold itself accountable to. It succinctly identifies what results the organization will accomplish, for whom, and in what time frame. While these frequently serve as complements to mission statements that tend to be fairly aspirational in character, they may actually be the same as mission statements where expected outcomes are set forth with sufficient clarity.
A theory of change is an expression of the sequence of cause-and-effect actions or occurrences by which organizational and financial resources are assumed to be converted into the desired social results. It provides a conceptual road map for how an organization expects to achieve its intended impact and is often displayed in a diagram. A framework built around concepts of activities, inputs, outputs, outcomes, and impacts is called a logic model.
Nonprofit organizations' mission and vision statements are often too broad or aspirational to enable clear decision making regarding resource allocation and trade-offs. Intended impact and theory of change fill this gap by defining clear, specific goals and showing how the organization's efforts will create this social change. This allows a nonprofit to make strategic decisions about how to use its time, talent and dollars to generate the maximum social returns. Strategizing using intended impact and theory of change constructs can help a nonprofit to:
Make tradeoffs among different programs, activities or investments
Plan, design, implement, and evaluate current and needed programs
Understand how its activities fit within a wider environmental context and mesh with others' activities, and identify any missing links that are essential to creating its desired impact
Communicate internally and externally about its strategy, priorities, and results compared to desired outcomes
Developing an organization's intended impact and theory of change is usually a highly participatory and iterative process involving many stakeholders, including senior leaders, board members, and key staff.
Articulating the intended impact requires specifying the change or social benefit the organization is committed to achieving, for whom, and in what timeframe. For example, "We will serve X population in Y geography to accomplish Z outcomes by 20XX." This requires thoughtful consideration regarding what level of progress is actually feasible and trade-offs among different potential goals (e.g., depth vs. breadth).
Developing a theory of change requires articulating specific and realistic answers to a series of questions:
What are the underlying needs and key characteristics of the population we want to serve?
What are the specific activities we believe we should offer to that population? For how long? How often?
By what sequence of causes and effects do we believe these actions will result in the impacts we aspire to achieve?
What staff, skills, systems, and tools do we need?
What external context is required to facilitate the desired effects?
Typically, a theory of change is displayed in a visual diagram with arrows showing connections.