5 benefits of a nonprofit theory of change
TRANSCRIPT
5 Benefits of a
Nonprofit Theory of Change
© 2016 Social Velocity
From An Executive Director…
“It’s so obvious to
me why peopleshould support
us.I don’t
understandwhy they
don’t get it.”
They don’t get it because you haven’t articulated your theory of change…
The Theory of Change
Community Resources Nonprofit Community
Change
What is a Theory of Change?
Target Population(s)
External Context Activities Short & Long
Term Outcomes Assumptions
What people or groups are you seeking to benefit or influence?
What relevant trends in or changes to the external environment are occurring?
How and where are your core competencies employed?
What changed conditions do you believe will result from these activities?
What evidence do you have that this theory will actually result in change?
The Theory of Change Answers
5 Key Questions…
Target Populatio
n
Tier 2 K-2nd grade
children in AISD
External Context
High school drop out
rate increasing
Activities
Provide daily,
targeted literacy
intervention
Short & Long-Term Outcomes
Students get to grade level in reading, improve
academics
Assumptions
Literacy rate at 3rd
grade predicts future
academic, life success
Like This…
ACE brings at-risk studentsto grade level in reading, resulting in:
More succeeding studentsBetter schoolsA more educated workforceA more equitable economy and community
So What?
The First Building Block
Builds Vision, Mission, Strategy
Engages Board & Staff
Helps Prove Impact
Allows Capacity Capital Attracts
More Support
Sustainable
Community Change
A Theory of Change
5 Benefits of The Theory of Change
1. Builds Vision, Mission, Strategy
2. Engages Board & Staff
3. Helps Prove Impact
4. Allows Capacity Capital 5.
Attracts More Support
Sustainable Community
Change
A Theory of Change
1. Builds Vision, Mission & Strategy
Theory of Change
Target Populatio
n
External Context
Activities Short/Long Term Outcomes
Assump-tions
What people or groups are you
seeking to benefit or influence?
What relevant
trends in or changes to the external environment
are occurring?
How and where are your core
competencies employed?
What changed
conditions do you
believe will result from
these activities?
What evidence do
you have that this
theory will actually result in change?
Relates to Mission
Relates to Vision
What is a Vision?Relates to “Short/Long Term Outcomes” of Theory of Change Describes an idealized future because of your nonprofit’s work“Every child is a successful reader before third grade, setting them on a path of excellence in school and in life.” (ACE)
“All people, even in the most remote areas of the globe, hold the power to create opportunity for themselves and others.” (Kiva)
What is a Mission?
Relates to “Activities” of Theory of ChangeDescribes your nonprofit’s day-to-day work toward the Vision“charity:water brings clean and safe drinking water to people in developing nations.”“Teach for America finds, trains and supports individuals who are committed to equality and places them in high-need classrooms across the country.”
Strategic Plan Process
Plot your nonprofit’s position in the external environment
Conduct market research to refine
Refine Vision/Mission
Create goals & objectives of strategic
planCreate budget
Opn plan
Goals & Objectives
Goal 1: XXGoal 2: XXGoal 3: XX
Goal 4: MoneyGoal 5: People & Infrastructure
Theory of
Change Goals
Organization Goals
From January 1, 2016 – December 31, 2018, we will:
2. Engages Board & Staff
Target Populatio
n
Tier Two K-2nd grade
children in AISD
External Context
High school drop out
rate increasing
Activities
Provide daily,
targeted literacy
intervention
Short & Long-Term Outcomes
Students get to grade level in reading, improve
academics
Assumptions
Literacy level at 3rd
grade predicts future
success
The Theory of Change
2016 Operational PlanGoal Objective Lead Milestone Checkpoint
(monthly, or quarterly, etc)
1. Parents 1. Marketing Strategy
Bob Written strategy
Outline by March 2016; market research by June 2016; Draft by Sept 2016; Final by Dec 2016
2. Students 1. Evaluate Data
Tom List of recommendations
List of available data Q1; Fully review data Q2; List of recommendations Q4
3. Teachers 1. Database Mary Database complete
List of fields by March 2016; database complete by Dec 2016
4. Revenue 1. Unrestricted Foundation
Phil $120K Gift range chart Jan; Prospect list Feb; Connections Mar; Meetings set Apr; Proposals June
Board
3. Helps Prove Impact
Theory of Change
Target Populatio
n
External Context
Activities Short/Long Term Outcomes
Assump-tions
What people or groups are you
seeking to benefit or influence?
What relevant
trends in or changes to the external environment
are occurring?
How and where are your core
competencies employed?
What changed
conditions do you
believe will result from
these activities?
What evidence do
you have that this
theory will actually result in change?
The impact of your programs
Then, Nonprofits Rated on...
...And Now Nonprofits Rated on…Overhead Expense Ratio
20%+ is unacceptable Financial HealthFinancial ratings tablesFundraising efficiencyWorking capital ratioRevenue & expense growthAccountability & Transparency
Independent boardAudited financialsPolicies/proceduresInformation sharingResults ReportingAlign mission and $Results logic & measuresValidatorsClient voiceEvaluations
Give based on values
Want to be engaged
Focus on impact
Pave their own way
Source: www.nextgen.org Johnson Center for Philanthropy and 21/64
Target Populatio
n
Tier 2 K-2nd grade
children in AISD
External Context
High school drop out
rate increasing
Activities
Provide daily,
targeted literacy
intervention
Short & Long-Term Outcomes
Students get to grade level in reading, improve
academics
Assumptions
Literacy rate at 3rd
grade predicts future
academic, life success
Prove Outcomes
Increased student reading levelIncreased student performance on standardized tests
Prove Outcomes
4. Allows Capacity Capital
The Starvation Cycle
Funders Demand More for
Less
Nonprofit Skimps on
Staff, Systems
Nonprofit Is Less
Effective
Fewer People Served,
Changed
RevenueOngoingSupports day-to-day BUYS services (beds for a homeless shelter)
vs. CapitalOne timeSupports infrastructureBUILDS organization (evaluation system)
Two Kinds of Money
A one-time infusion of significant money to fund:
TechnologySystemsPlanningDevelopment staffTrainingLeadership development
Capacity Capital
BeforeTutoring 800 students/yearSmall, disengaged boardLack of management expertiseLimited individual & school district dollars
Raised $60K+ in capacity capital for planning & management coaching
AfterTutoring 2,400 students (3X growth in students)Larger, more engaged boardSignificant financial commitment from school districtGrowing donor base
Nonprofit lacks infrastructure
Capacity capital strengthens the nonprofit
Nonprofit achieves more outcomes, impact
What Capacity Capital Does…
1. List Your NeedsWhat is holding your org back?
2. Add a Plan and Price TagWhat is your plan and what will it cost?
3. Identify Current Major Donors or BoardWho could be convinced of the need?
4. Make the PitchCapacity investments = more social change
Build Your Capacity Capital Pitch
5. Attracts More Support
Message Impact
The nonprofit is anintermediary
that causes community change
Donor invests in a nonprofit with shared values
Nonprofit translates that support into change
Community change occurs
Begging
“With your $100, we can house our clients tonight.”
InvestingWith your $100, homeless adults gain…
A place to sleepAccess to tools for a job search
Which leads them to… Find jobs, housingBecome self-sufficientNo longer be a burden
As a donor, you help create…Lower social costsMore contributing citizensStronger, healthier community
Messaging Focus
Fundraiser
Mentality
Donor Mentality
Org Mentality
ROI
Donation Vs. Investment
Fundraising goals Community change
Tin cup Opportunity
What’s in it for me? Let’s change the world
Reactive
Recognition, benefits
Strategic
Social change
What are you offering?A. A new building
B. The opportunity to transform lives through state of the art research labs that will find a cure for cancer by 2040
Why should I give?C. Because our nonprofit needs money
D. Because cancer kills 7.6 million people each year and our nonprofit is leading the fight for a cure
Learn More…
sociavelocity.net/tools
OtherNonprofit Tools
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socialvelocity.net/tools
Nonprofit Strategic Planning
Create momentumAttract deeper fundingFilter future decisionsCreate a management toolRealize more change
More info at socialvelocity.net/consulting
© 2016 Social Velocity
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