What is a Theory of Change?

TL;DR: A theory of change is a structured explanation of how your charity's resources and activities lead to meaningful change in the world. It maps the causal chain from inputs through activities, outputs, and outcomes to long-term impact. Funders — including the National Lottery Community Fund — increasingly ask for one as part of grant applications. For a full step-by-step guide, see Theory of Change for Charities.

The Short Definition

A theory of change is a document or diagram that explains how and why your charity's work is expected to produce the outcomes it aims for. It makes your assumptions explicit: if we invest these resources, do these activities, and reach these people, then we expect these changes to happen — for these reasons.

The concept has its roots in programme evaluation research from the 1990s and has since become standard practice in the UK charity sector, promoted by organisations such as NPC (New Philanthropy Capital) and NCVO. It is sometimes called a "change map" or used interchangeably with a logic model, though a logic model tends to be a simpler, more linear version of the same idea.

According to NCVO, a clear theory of change links resources and activities to the outcomes and impact an organisation aims to achieve, and funders and supporters are increasingly expecting to see evidence of impact before committing resources. (NCVO)

How It Works: The Five-Stage Chain

A theory of change follows a logical causal sequence. Each stage leads to the next:

The key feature that distinguishes a theory of change from a simple list of activities is the explanation of why each step is expected to lead to the next. Those explanatory links — sometimes called "assumptions" — are where the real thinking happens. They draw on evidence, research, and the lived experience of people who deliver and use your services.

The National Lottery Community Fund, which distributes over £600 million annually across the UK, uses this framework explicitly in its own evaluation guidance, tracing pathways from inputs through activities to short-term, medium-term, and long-term outcomes.

Why Charities Use a Theory of Change

A theory of change is useful well before any funder asks for it. Internally, it helps a charity:

• Clarify its purpose — forcing teams to agree on what change they are actually trying to achieve, and for whom.
• Design better programmes — by testing whether the planned activities are logically likely to produce the intended outcomes.
• Decide what to measure — a good theory of change points directly to the outcomes and outputs you need to track, making impact measurement more focused and less burdensome.
• Communicate impact clearly — to trustees, staff, volunteers, and the public.

Tools like Plinth's Impact Reporting are designed to work alongside your theory of change, helping you capture the outcome evidence that the framework identifies as important. Surveys can be structured around each stage of the chain, from baseline inputs through to post-programme outcome data.

NPC, which has worked with hundreds of charities across the UK on impact measurement, recommends that all social purpose organisations build their work on a theory of change. Its practical guide describes the process as the foundation of charity strategy, evaluation, and communication. (NPC, Ten Steps)

What Funders Ask For

The requirement to show a theory of change has become widespread across UK grant funding. The National Lottery Community Fund explicitly states in its eligibility criteria that applicants must "have a theory of change or similar document showing how the product or service will achieve aims that benefit a specific group of people." Many other major trusts, foundations, and statutory commissioners use similar language.

Even where funders do not use the phrase "theory of change" directly, grant application questions — such as "describe how your activities will lead to the outcomes you have identified" — are asking for the same reasoning in narrative form.

This shift reflects a broader move in the UK charity sector towards outcome-based funding, which has accelerated since around 2015. Funders want to see not just that you plan to do something, but that you have a credible, evidence-informed account of why it will work.

Frequently Asked Questions

Is a theory of change the same as a logic model?

These terms are often used interchangeably, but there is a distinction. A logic model is typically a simpler, more linear diagram showing the inputs-to-outcomes chain. A theory of change is usually richer — it includes the assumptions and evidence that explain why the chain should hold. See our full guide to logic models for charities for a detailed comparison.

Does a small charity need a theory of change?

Yes — but it does not need to be lengthy or complex. A one-page diagram or a short narrative paragraph can be enough. What matters is that you have thought through the causal pathway from your activities to your intended outcomes. Many funders accept a simplified version for smaller grants.

How often should a theory of change be updated?

A theory of change should be a living document. Most charities revisit theirs annually or when a programme changes significantly. As you collect outcome evidence through impact measurement and reporting, you may find that some of your original assumptions need revising.

Recommended Next Pages

• Theory of Change for Charities: The Complete Guide — Step-by-step guidance on building, testing, and using a theory of change in your organisation.

• What is a Logic Model? — How logic models relate to theories of change, and when to use each.

• What are Outcomes and Outputs? — Understanding the critical difference between what you deliver and the change you create.

• What is Impact Measurement? — How to collect and use the evidence that brings your theory of change to life.

Published by the Plinth Team. Last updated 21 February 2026.