Theory of change for funders: planning to make a difference

Document type
Plimmer, Dawn; Kail, Angela
New Philanthropy Capital
Date of publication
10 December 2014
Social Policy, Community Development and Regeneration
Social welfare
Material type

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A theory of change is a tool that shows the path from needs to activities to outcomes to impact. It describes the change you want to make and the steps involved in making that change happen. Theories of change also depict the assumptions that lie behind your reasoning, and where possible, these assumptions are backed up by evidence. In short, a theory of change helps an organisation to show how it makes a social impact—what it aims to change, and how that change occurs. Funders can achieve social impact in a number of different ways:

  1. Funders can have an impact on beneficiaries through funding charities to deliver services—for example, through funding a charity to work with disengaged young people, more students stay in school
  2. Funders can have a wider impact on organisations beyond funding direct service delivery, through supporting them to become more efficient and effective at achieving their mission.
  3. Funders can have a direct impact on a social problem through their own activities. Funders themselves can be important agents for change: for example, they can use the experiences of their grantees to advocate on their behalf, or spread good practice about what works.

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