A theory of change is an explanation of why your work should make a difference. It fits in a few sentences: when we do this, this changes for these people, because of that. Everything else written about it – the inputs and outputs, the outcome chains, the logic models, the diagrams with forty boxes – is a way of setting out those sentences in more detail.
Most small charities meet the subject through the detail rather than the sentences. A funder asks for one, someone finds a template, and the board spends an evening arguing about what counts as an intermediate outcome. What comes out the other end is usually a list of activities with arrows between them. The sentences come first. The diagram, if anyone needs one, comes last.
Being asked for a theory of change as part of a bigger strategy conversation? The two belong together, and it is easier to write one when the other is settled. See how we work on charity strategy.
What a theory of change is, in plain terms
It answers the question a thoughtful trustee or funder eventually asks: why do you believe this works? A list of what you do does not answer it, and neither does a list of what you hope will happen. The answer sits in the connection between the two.
There are four parts to that connection. What you do. What changes as a result. Who it changes for. And the reason you believe the first leads to the second. The standard vocabulary maps onto these without much difficulty. Outputs are what you did and counted; sessions run, people seen. Outcomes are what changed for the people involved. Impact is the longer-term difference those changes add up to. A logic model draws the same chain in a straight line, usually without the reasons.
If the terminology puts you off, you are in good company. NPC, whose guide is the one most charities are pointed to, acknowledges that people find the phrase jargon-heavy and academic. The idea underneath it is neither.
Why the Governance Code now expects one
The Charity Governance Code, updated in November 2025, names it directly. Under organisational purpose, one of the practices it lists is that the board, involving its stakeholders, has set a long-term vision and a theory of how the charity’s activities lead to change. Among the evidence it suggests a board can point to is something showing the link between activities and long-term impact, with a theory of change given as the example.
The Code is not law. It applies on an apply-or-explain basis, and it is written as one code for charities of every size, so a small charity is expected to take it in proportion rather than ignore it. Two things in that practice are worth noticing. It is the board’s job, not a task for whoever writes the funding bids. And it expects stakeholders to be involved, which rules out the version written by one person the night before a deadline.
That second point is where most of the value is. A theory of change written by the chief executive alone records what one person believes. Written with trustees, staff and, where possible, the people the charity works with, it becomes a record of what the charity has agreed it is trying to do, and that is something the board can then hold itself to.
Writing it as sentences before drawing any boxes
Start from the change rather than the activity. The question is what should be different, and for whom, if your work goes as intended. Starting from the activity produces a description of your services. Starting from the change forces you to say what the services are for.
Then write one sentence per programme, in this form:
When we [do this], [this group] will [change in this way], because [this is why we believe it].
Most programmes need two or three of these, linked. The change in the first sentence becomes the starting condition for the second: once someone can do one thing, they are in a position for the next thing to happen. Two or three links are usually enough for a small charity. If you find yourself writing seven, the later ones are probably describing hopes rather than anything your work can reach.
Two tests keep the sentences honest. The change should be something that could be observed, so words like improve, empower and support do not count on their own; they describe intentions. And the group should be specific enough that you could say who is in it and who is not.
A programme that will not produce a sentence is telling you something. Sometimes the change is there, and nobody has put it into words. Sometimes the programme is running because it has always run, and the theory is the first place that shows.
The part most theories of change leave out
The because. It is the reason you believe the activity leads to the change, and it is the only part of the whole exercise that tells anyone something they did not already know. Every charity can list what it does and what it hopes will follow. The reasons are where the thinking is, and where the weak points are.
NPC’s guide leaves assumptions until its tenth and final step, which is logical as a sequence, but in practice it is the step that gets dropped when the evening runs long. It is important to write the reasons alongside each sentence from the start.
Be honest about where each reason comes from. A reason can rest on evidence, meaning published research or your own records over several years. Others come from experience, what staff and volunteers have seen happen repeatedly. And some are beliefs: something that seems right and has never been tested. All three are legitimate. A theory that labels an untested belief as such is more useful than one that dresses it up, because the untested beliefs are exactly what you should be checking.
Assumptions about who takes part tend to be the ones worth writing down first. Most theories quietly assume the right people will come, will stay long enough, and will be in a position to benefit. When a programme underperforms, the reason often sits there rather than in the activity itself.
The four parts of every link in the chain
Every sentence in a theory of change has the same four parts. What you do is the activity, described clearly. What changes is the difference it makes, stated as a change and not an intention. For whom is the specific group it changes for, narrow enough that you could say who is in it. And because that is why you believe one leads to the other, which is the part worth spending the most time on.
Where the theory goes next. The Charity Strategy Toolkit does not include a theory of change template. It covers the two pieces either side of one: mapping your charitable objects to the programmes you run, in the strategic plan, and turning the changes you are aiming for into three to five outcome indicators on a one-page strategy.
How it connects to your strategy and your reporting
A theory of change is the reasoning under your strategy, not a separate document competing with it. The purpose sentence on a one-page strategy is the top of the chain. The priorities are the changes you have chosen to pursue in this period. The success measures test particular links, the ones you are least sure of or most need to show.
If you are registering a new charity, the same reasoning connects your evidence of need to your objects and then to your planned activities. The Commission is assessing what makes your purposes charitable rather than asking for a theory of change by name, but the join between need, objects and activity is the same join.
Reporting is where the theory gets tested. An impact report sets what you did and what you observed changing against what you said would happen. Where they match, the theory holds. Where they do not, you have learned which because was wrong, which is the most useful thing a year of delivery can tell you.
Funding pulls the other way. Most restricted grants pay for activity, because activity is what a funder can hold you to inside a grant period, and a grant that covers the activity rarely covers the rest. A charity that only reports what its funders pay for ends up counting outputs and calling them results. The theory is the place you keep the longer chain in view, including the links nobody is currently paying you to show.
When a funder wants the diagram
Draw it from the sentences, not the other way round. Each part of a sentence becomes a box, and each because becomes the arrow between two of them. If a funder’s form has its own template, use theirs; sentences written properly transfer into any format, where a diagram built in one funder’s template rarely transfers into another’s.
Keep the sentences as the working version and treat the diagram as the version you send. The sentences are what the board reviews, what new trustees read, and what gets revised when the evidence changes. Diagrams tend to be redrawn only when the next application is due.
Review it when something changes rather than on a calendar. A programme that stops working, a group you are no longer reaching, a piece of research that undermines one of your reasons – each is a pressure to go back to the sentence it affects. A theory that has not changed in several years of delivery is either very good or not being looked at.
And if the sentences will not come because nobody can agree on what change the charity is for, the theory of change is not the problem. The disagreement is. That is important to locate before anyone writes anything, and the Charity Growth Diagnostic is one way to see where it sits.
When the board cannot agree on what change it is trying to make, a template will not settle it. That conversation needs someone outside the room to hold it steady, and it is the one worth having before any theory is written down. Book a free 30-minute call.
