Connecting a Theory of Change and SROI

Theory of Change pathway from inputs and activities to outputs, outcomes and impact, showing how SROI builds on this pathway by assigning value to outcomes.

One of the most common questions during our webinar was whether organisations should develop a Theory of Change before undertaking an SROI study. The answer is simple: you can start from either direction. Both approaches are valid, and each serves a different purpose.

Approach 1: Start With Your Theory Of Change

Many NGOs, CSR programmes and social enterprises already have a Theory of Change: a visual or narrative explanation of how its activities are expected to lead to meaningful change.

In this case, an SROI study becomes an opportunity to test those assumptions rather than simply confirm them. This requires a distinction in how beneficiaries are engaged: beneficiaries should not be asked whether the outcomes in the Theory of Change happened; instead, they should first be encouraged to describe, in their own words, what changed in their lives because of the programme.

Only after these stakeholder-generated outcomes have emerged should they be mapped back to the Theory of Change.

This allows organisations to answer important questions:

• Were the expected outcomes actually experienced?

• Which assumptions were validated?

• Which outcomes were missing from the Theory of Change?

• Were there any unintended positive or negative changes?

Rather than treating the Theory of Change as something to prove, SROI treats it as a hypothesis that can be tested, refined and strengthened.

Approach 2: Start With Stakeholder’s Voice

Some organisations begin without a formal Theory of Change or want to revisit assumptions that were developed several years earlier. In these situations, SROI can begin with a much more open process. Stakeholders are invited to reflect on questions such as:

• What has changed in your life because of this programme?

• Which of these changes matter most to you?

• What did those changes make possible?

  
  

These conversations often lead to the development of Chain of Change Maps that illustrate how one outcome/change enabled another.

For example: Skills training → Better employment → Higher income → Reduced financial stress → Greater confidence → Increased decision-making within the household

These stakeholder-generated pathways often reveal outcomes that organisations had never considered. They can then be used to build or refine the Theory of Change from the ground up.

Two Starting Points, One Destination

Whether you begin with an existing Theory of Change or with stakeholder experiences, the objective remains the same: to understand what changed, why it changed, and what value those changes created.

The two approaches are complementary.

• If you already have a Theory of Change, use SROI to validate and strengthen it using stakeholder-generated outcomes.

  
  

• If you don't yet have a Theory of Change, begin with stakeholders, develop Chain of Change Maps, and use these insights to build a Theory of Change that reflects how change actually happens.

  
  

The strongest organisations recognise that a Theory of Change is never a static document. It should evolve as new evidence emerges. SROI provides a structured way to ensure that this evolution is grounded in the lived experiences of the people the programme exists to serve.

Watch the full webinar here:

https://www.youtube.com/watch?v=b7glYaklW6wZ

If you're looking to build your first SROI, the following open-access resources are the best place to start.

Resource	What it includes
Guide to SROI – Social Value International	The definitive step-by-step guide to conducting an SROI, from stakeholder engagement and Theory of Change to valuation, discounting and reporting.
Value Map Template – Social Value International	The standard template is used to map stakeholders, outcomes, indicators, financial proxies and impact adjustments across any SROI study.
Standards and Guidance – Social Value International	Detailed guidance on applying the Principles of Social Value, including materiality, stakeholder engagement, valuation and assurance.
Social Return on Investment (SROI) Sample Reports	Case studies, technical papers and practical examples across different sectors.
Global Value Exchange	A searchable database of indicators, outcomes and financial proxies that can support valuation, while always requiring contextual adaptation.