Establishing a Theory of Change for Non-Profit Organizations

180 Degrees Consulting Waterloo
4 min readJun 24, 2022


How can an NPO effectively reach its goals and create change in the community? What is a constructive way to evaluate an organization’s social impact? How can organizations manage their assets like donations, volunteers, and partners to impact the community?

These questions can all be answered through a Theory of Change.

What is a Theory of Change?

A Theory of Change is an element non-profit organizations can use to plan out the specific details of their organization, the goals they are trying to reach, and establish a clear connection between their resources and actions with the impacts they set to make.

Why is a Theory of Change Important?

A Theory of Change allows organizations to establish a clear path of how their organization can go about reaching their goals on social impact. It allows their donors, audience, and board members to have a clearer idea of what the organization is capable of doing.

How can an organization create a Theory of Change?

  1. Identify the Target Problem: Think about the issue your organization is trying to address including your targeted consumers and where the issue takes place. Remember that you need to find proof that the issue exists. You should also think about why the issue is significant for others that are not directly involved (Social Velocity, n.d.).

Ex. Helping more elementary school students that are struggling with spelling in Toronto. Around 30% of these students respond that they find their spelling exercises too difficult to complete and it is hard for them to find the right aids.

2. Probable Solutions to the Problem: List the actions and activities your organization can partake in to tackle the issue.

Ex. Create a spelling practice box with games, exercises, and flashcards for elementary school students to use and bring home in the Toronto area.

3. Short and Long-term Results: Predict any short-term and long-term results that will happen based on the actions of your organization (Social Velocity, n.d.).

Ex. A short-term result can be that 5% of students around the neighbourhood can receive help from having the spelling practice box. A long-term result can be that 10% of these students will improve their English marks by a grade level at the end of the year.

4. Predictions and Assumptions: Research and make assumptions related to your actions (Social Velocity, n.d.).

Ex. There is a lack of resources and funding from public schools to help every student that needs it.

5. Revise and Update: After establishing your initial theory of change, always keep an open mind about revising it when necessary (Social Velocity, n.d.).

Thus, having a simple theory of change can influence how an organization reaches success. It guides and acts like a map for organizations to clearly understand what they need to do to create change in their communities.


Alile, Osayi. (2021, April 6). Social Impact for Nonprofits 101. Linkedin.

Betancourt, Y., Nayak, P., Trustry, B., & Waldron, L. (2020, December 14). What Are Intended Impact and Theory of Change and How Can Nonprofits Use Them? The Bridgespan Group.

Ressler, Eric. (2019, December 31). How to Develop a Simple Theory of Change for your Nonprofit. Cosmic.

Social Velocity. (n.d.). Design a Theory of Change.

Written by: Alina Liu



180 Degrees Consulting Waterloo

Student led organization enhancing Non-Profits and social enterprises through Consulting services.