The document discusses the benefits of developing a theory of change for nonprofits. It explains that a theory of change 1) builds vision, mission, and strategy by relating activities to short and long-term outcomes; 2) engages board and staff by incorporating goals and objectives into operational plans; 3) helps prove impact by aligning metrics to measure outcomes; 4) allows capacity capital by demonstrating need for infrastructure to achieve greater impact; and 5) attracts more support by framing donations as investments in outcomes rather than needs.

1. 5 Benefits of
a Nonprofit
Theory of
Change
© 2016 Social Velocity

2. From An Executive
Director…
“It’s so obvious to
me why people
should support us.
I don’t understand
why they
don’t get it.”

3. They don’t get it
because you haven’t
articulated your
theory of change…

4. The Theory of Change

5. Community
Resources Nonprofit Community
Change
What is a
Theory of Change?

6. Target
Population(s)
External
Context
Activities
Short & Long Term
Outcomes
Assumptions
What people or
groups are you
seeking to
benefit or
influence?
What relevant
trends in or
changes to the
external
environment
are occurring?
How and where
are your core
competencies
employed?
What changed
conditions do you
believe will result
from these
activities?
What evidence
do you have that
this theory will
actually result in
change?
The Theory of Change
Answers
5 Key Questions…

7. Target
Population
Tier 2 K-2nd
grade
children in
AISD
External
Context
High school
drop out rate
increasing
Activities
Provide
daily,
targeted
literacy
intervention
Short &
Long-Term
Outcomes
Students get
to grade level
in reading,
improve
academics
Assumption
s
Literacy rate
at 3rd grade
predicts
future
academic, life
success
Like This…

8. ACE brings at-risk students
to grade level in reading,
resulting in:
More succeeding students
Better schools
A more educated workforce
A more equitable economy and community
So What?

9. The First
Building Block
Builds
Vision,
Mission,
Strategy
Engages
Board &
Staff
Helps Prove
Impact
Allows
Capacity
Capital Attracts
More
Support
Sustainable
Community
Change
A Theory
of Change

10. 5 Benefits of
The Theory of Change

11. 1.
Builds
Vision,
Mission,
Strategy
2.
Engages
Board &
Staff
3. Helps
Prove
Impact
4. Allows
Capacity
Capital 5. Attracts
More
Support
Sustainable
Community
Change
A Theory
of Change

12. 1. Builds Vision, Mission &
Strategy

13. Theory of Change
Target
Population
External
Context
Activities Short/Long
Term
Outcomes
Assump-
tions
What people
or groups are
you seeking to
benefit or
influence?
What relevant
trends in or
changes to the
external
environment
are occurring?
How and
where are
your core
competencies
employed?
What changed
conditions do
you believe
will result from
these
activities?
What
evidence do
you have that
this theory will
actually result
in change?
Relates to
Mission
Relates to
Vision

14. What is a Vision?
Relates to “Short/Long Term Outcomes” of Theory of
Change
Describes an idealized future because of your
nonprofit’s work
“Every child is a successful reader before third
grade, setting them on a path of excellence in school
and in life.” (ACE)
“All people, even in the most remote areas of the
globe, hold the power to create opportunity for
themselves and others.” (Kiva)

15. What is a Mission?
Relates to “Activities” of Theory of Change
Describes your nonprofit’s day-to-day work
toward the Vision
“charity:water brings clean and safe drinking water to
people in developing nations.”
“Teach for America finds, trains and supports
individuals who are committed to equality and places
them in high-need classrooms across the country.”

16. Strategic Plan
Process
Plot your nonprofit’s position in the external
environment
Conduct market research to refine
Refine Vision/Mission
Create goals &
objectives of strategic
plan
Create budget
Opn
plan

17. Goals & Objectives
Goal 1: XX
Goal 2: XX
Goal 3: XX
Goal 4: Money
Goal 5: People & Infrastructure
Theory
of
Change
Goals
Organization
Goals
From January 1, 2016 – December 31, 2018, we will:

18. 2. Engages Board & Staff

19. Target
Population
Tier Two K-
2nd grade
children in
AISD
External
Context
High school
drop out rate
increasing
Activities
Provide
daily,
targeted
literacy
intervention
Short &
Long-Term
Outcomes
Students get
to grade level
in reading,
improve
academics
Assumption
s
Literacy level
at 3rd grade
predicts
future
success
The Theory of
Change

20. 2016 Operational Plan
Goal Objective Lead Milestone Checkpoint (monthly,
or quarterly, etc)
1. Parents 1. Marketing
Strategy
Bob Written strategy Outline by March
2016; market research
by June 2016; Draft by
Sept 2016; Final by
Dec 2016
2. Students 1. Evaluate Data Tom List of
recommendations
List of available data
Q1; Fully review data
Q2; List of
recommendations Q4
3. Teachers 1. Database Mary Database
complete
List of fields by March
2016; database
complete by Dec 2016
4. Revenue 1. Unrestricted
Foundation
Phil $120K Gift range chart Jan;
Prospect list Feb;
Connections Mar;
Meetings set Apr;
Proposals June

21. Board

22. 3. Helps Prove Impact

23. Theory of Change
Target
Population
External
Context
Activities Short/Long
Term
Outcomes
Assump-
tions
What people
or groups are
you seeking to
benefit or
influence?
What relevant
trends in or
changes to the
external
environment
are occurring?
How and
where are
your core
competencies
employed?
What changed
conditions do
you believe
will result from
these
activities?
What
evidence do
you have that
this theory will
actually result
in change?
The impact of your
programs

24. Then, Nonprofits
Rated on...
...And Now
Nonprofits
Rated on…Overhead Expense Ratio
20%+ is unacceptable Financial Health
Financial ratings tables
Fundraising efficiency
Working capital ratio
Revenue & expense growth
Accountability & Transparency
Independent board
Audited financials
Policies/procedures
Information sharing
Results Reporting
Align mission and $
Results logic & measures
Validators
Client voice
Evaluations

25. Give based on values
Want to be engaged
Focus on impact
Pave their own way
Source: www.nextgen.org Johnson Center for Philanthropy and 21/64

26. Target
Population
Tier 2 K-2nd
grade
children in
AISD
External
Context
High school
drop out rate
increasing
Activities
Provide
daily,
targeted
literacy
intervention
Short &
Long-Term
Outcomes
Students get
to grade level
in reading,
improve
academics
Assumption
s
Literacy rate
at 3rd grade
predicts
future
academic, life
success
Prove Outcomes

27. Increased student reading level
Increased student performance
on standardized tests
Prove Outcomes

28. 4. Allows Capacity Capital

29. The Starvation
Cycle
Funders
Demand
More for
Less
Nonprofit
Skimps on
Staff,
Systems
Nonprofit
Is Less
Effective
Fewer
People
Served,
Changed

30. Revenue
Ongoing
Supports day-to-day
BUYS services (beds for a homeless shelter)
vs. Capital
One time
Supports infrastructure
BUILDS organization (evaluation system)
Two Kinds
of Money

31. A one-time infusion of
significant money to fund:
Technology
Systems
Planning
Development staff
Training
Leadership development
Capacity Capital

32. Before
Tutoring 800 students/year
Small, disengaged board
Lack of management expertise
Limited individual & school district dollars
Raised $60K+ in capacity capital for
planning & management coaching
After
Tutoring 2,400 students (3X growth in students)
Larger, more engaged board
Significant financial commitment from school district
Growing donor base

33. Nonprofit
lacks
infrastructure
Capacity
capital
strengthens
the nonprofit
Nonprofit
achieves
more
outcomes,
impact
What Capacity
Capital Does…

34. 1. List Your Needs
What is holding your org back?
2. Add a Plan and Price Tag
What is your plan and what will it cost?
3. Identify Current Major Donors or Board
Who could be convinced of the need?
4. Make the Pitch
Capacity investments = more social change
Build Your
Capacity Capital Pitch

35. 5. Attracts More Support

36. Message Impact
The nonprofit is an
intermediary
that causes community change
Donor invests in
a nonprofit with
shared values
Nonprofit
translates
that support
into change
Community
change
occurs

37. Begging
“With your $100, we can house our
clients tonight.”

38. Investing
With your $100, homeless adults gain…
A place to sleep
Access to tools for a job search
Which leads them to…
Find jobs, housing
Become self-sufficient
No longer be a burden
As a donor, you help create…
Lower social costs
More contributing citizens
Stronger, healthier community

39. Messaging Focus
Fundraiser Mentality
Donor Mentality
Org Mentality
ROI
Donation Vs. Investment
Fundraising goals Community change
Tin cup Opportunity
What’s in it for me? Let’s change the world
Reactive
Recognition, benefits
Strategic
Social change

40. What are you offering?
A. A new building
B. The opportunity to transform lives through
state of the art research labs that will find a
cure for cancer by 2040
Why should I give?
A. Because our nonprofit needs money
B. Because cancer kills 7.6 million people
each year and our nonprofit is leading the
fight for a cure

41. Learn More…
sociavelocity.net/tools

42. Other
Nonprofit Tools
Books
Bundles
Webinars
Guides
socialvelocity.net/tools

43. Nonprofit Strategic
Planning
Create momentum
Attract deeper funding
Filter future decisions
Create a management tool
Realize more change
More info at
socialvelocity.net/consulting

44. © 2016 Social Velocity
www.socialvelocity.net
(512) 694-7235
Twitter: @nedgington
Facebook: Social Velocity