Theory of Change, Monitoring, and Evaluation: Understanding an Organization’s Activities, Outcomes, and Impact

Learn how to evaluate a nonprofit’s theory of change, or develop your own.

Understanding an organization’s theory of change helps you make your own assessment of whether an organization has sound strategies for achieving your shared objectives. Whether or not an organization uses any particular term is unimportant. What matters is whether it is clear about its intended ultimate outcomes, or goals, and whether it can cogently explain how its activities are likely to lead to those outcomes.

This chapter covers three questions:

  • What is a theory of change and why is it important?
  • How can an organization know if it is on track with its theory of change and if it is having the desired impact?
  • As a donor, how might I develop a theory of change for my giving?