Understanding how and why changes occur and how these lead to the realization of impact goals, helps determine what activities will be needed to make this happen and what investment is needed to do so.
A theory of change makes explicit the intermediate changes necessary to realize your impact goal. It should always be actor-centered: who needs to change in which way? Changes can be in knowledge, attitudes, behaviors, relationships, …
A theory of change goes beyond your own organization. It looks at the whole system and all actors in it. In this way it takes into account system thinking and complexity.
Make sure to put enough “theory” in your theory of change. Your pathways of change should be based on existing research or sound evidence from the field. When that does not (yet) exist, recognize the assumptions you are making and make sure to include them in your impact measurement plan (step 3) in order to collect the necessary data to test them.
There are several reasons why it is interesting to create a Theory of Change. In the figure below we listed some of them.