Why every nonprofit needs a theory of change

I may be completely wrong, but I feel like a lot of us in the nonprofit space hear “theory of change” and we nod.

“Yes, yes, theory of change! Very important!”

If asked, we answer, “oh yes, we have one.” If pressed we might say, “we think the team knows what it is.” But from there, could we really be confident that the team could articulate it or explain how their day-to-day work connects to it?

A theory of change so often is part of the nonprofit jargon that we learn in school, use in grant writing, and quietly tuck away in our strategic plan (and yes, strategic plans deserve their own attention entirely).

In our defense, nonprofits are so busy “doing” that stopping to contemplate the “why” of the doing feels like a luxury. Even so, amidst the daily grind, the work itself should not eclipse the theory of change. It should be guided by it.

Because, put simply, a theory of change is the backbone of a nonprofit’s purpose.

But before I get too far ahead of myself, let’s go back into the classroom to remember why the theory of change matters.

What is a theory of change and why does it matter?

Formally, a theory of change is a process model (usually documented) that explains how change comes about by the work a nonprofit does. It articulates how a program should work, what activities will take place, who will be impacted, how it will impact them, and upon what evidence and assumptions the process exists.  (If you’re curious, there’s a solid breakdown from the https://www.aecf.org/resources/theory-of-change.)

At its core, a theory of change articulates what an organization believes it takes to make the change they want to see in the world.

Once developed, a theory of change helps:

• design programs and activities

  
  

• assess whether those programs and activities have the desired effect

  
  

• build a foundation for monitoring and evaluating the work.

In other words, it doesn’t just provide direction and justification for the work, it presents the existential meaning of the work.

Do nonprofits really NEED a theory of change to operate?

As science will tell you, many organisms live without a backbone, but a spine gives an organism structural support, agility, and the ability to grow. To exhaust this metaphor, people run nonprofits all the time without an articulated theory of change but at some point, someone, somewhere will ask you for it. And the truth is, a theory of change may not be needed for a nonprofit to exist, but it does help a nonprofit to THRIVE.

What’s more, much of the literature on the matter will say that a theory of change should be designed prior to program launch.

In my experience, since nonprofits typically spring out of a need that isn’t being met, a theory of change is often uncovered after the actual work begins.

Nevertheless, at some stage in a nonprofit’s lifecycle, they encounter the choice of whether to develop and articulate a theory of change.

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Core elements of a theory of change

To state briefly (because a step-by-step guide on creating a theory of change is well beyond the scope of this humble blog), all theories of change include four essential components:

1. Defined interventions – The programs, activities, or projects designed to create change.

   
   

2. Expected results – Not just the outputs (e.g., number of tutoring hours, calls made), but also who is impacted (e.g., students, families) and the short-term and long-term outcomes (e.g., improved reading levels, stronger social connections).

   
   

3. Stated assumptions – The often invisible “this should work because…” beliefs that underpin the model. This is one of the most critical and frequently overlooked components. When results don’t align with expectations, it’s usually the assumptions that need a reality check (much more on assumptions to come in a future blog.)

   
   

4. A plan for testing and refinement – A theory of change is a starting point, not a “let there be light” declaration. It’s a living framework that must be tested, challenged, and adjusted as real-world results come in. Testing a theory of change keeps it grounded, honest, actionable, and aligned with reality.

   
   

Final words…TELL people what the theory of change is

Having a theory of change is meaningless if people don't know what it is.

Everyone involved with the organization should have a basic understanding of it. This not only means the leadership team, staff, and board members, but also the donors, grantors, volunteers, and community ambassadors (essentially anyone contributing time, money, or labor).

They don’t need to memorize every detail, but they should understand it so they can speak confidently about the organization, make informed decisions, and trust that their contributions are moving toward meaningful impact.

When everyone, from leadership to volunteers, understands how their efforts connect to the bigger picture, the organization moves with purpose and clarity.

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Done well, a theory of change isn’t just a document to file away; it aligns daily work with real impact, tests assumptions, and keeps the mission on track.

I think we can all nod and appreciate that.