Measuring Impact: Theory of Change

How nonprofits map how their work leads to results, why measuring outcomes differs from counting activities, and how funders use impact evidence.

Donors and funders increasingly want to know not just what a nonprofit does, but what difference it makes. A theory of change is a tool that helps organisations explain and test how their work leads to results.

The chain of results

A theory of change describes a chain:

Inputs: resources such as money, staff and volunteers.
Activities: what the organisation does, such as running classes.
Outputs: direct products of activities, such as the number of students taught.
Outcomes: changes in people’s lives, such as improved reading skills.
Impact: long-term effects, such as better employment.

It also states the assumptions that link each step. For example, that students who attend classes will practise and learn.

Outputs versus outcomes

A common mistake is reporting outputs as if they were outcomes. “We distributed 10,000 textbooks” is an output. Whether children learned more is an outcome. Funders and evaluators increasingly focus on outcomes.

Measuring impact

To know whether a programme caused an outcome, organisations need a comparison: what would have happened without it. Methods range from simple before-and-after surveys to rigorous randomised evaluations. Organisations such as GiveWell rely heavily on strong evidence when recommending charities.

Proportionate measurement

Rigorous evaluation can be expensive. Small nonprofits may not afford randomised trials. Experts suggest proportionate measurement: tracking key outcomes, collecting feedback from the people served and using existing research on similar programmes.

An audio library for blind students

A nonprofit records textbooks as audio for blind students. Its inputs are volunteers and recording equipment; its activities are recording and distributing books; its outputs are the number of books recorded and students reached. Its intended outcomes are that students keep up with coursework and pass exams; its longer-term impact is higher education and employment. Tracking exam results and student feedback helps show whether the chain actually works.

Thinking activity numbers prove impact

Large numbers of people served or events held show effort, not necessarily change. A theory of change and outcome measurement help show whether the work actually improves lives.

Key takeaways

A theory of change maps inputs, activities, outputs, outcomes and impact.
Outputs are what an organisation produces; outcomes are changes in people's lives.
Measuring impact requires comparing with what would have happened otherwise.
Small nonprofits can use proportionate measurement and existing research.