A well-developed ToC ensures efficiency in planning, implementation and evaluation of development projects. It is a comprehensive methodology used by the not-for- profit, social impact business, impact investing and Government sectors to promote socially responsible investing. It is mapped in an ‘Outcome Framework’ which defines long-term goals for social change and then maps backward the activities that must be undertaken to achieve and sustain the desired change.
A Theory of Change is a visual representation of the change that social investments and programs will make on the ecosystem it operates in. It illustrates the background and context of social investments, closely examining the assumptions and justifications to link impact to investment decisions, while preparing the base for collecting and using data to understand and manage the social impact of those investments.