Using a Theory of Change Approach to Helping Nonprofits Manage to Outcomes

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Using a Theory-of-Change Approach to
Helping Nonprofits Manage to Outcomes
by David E. K. Hunter, Ph.D.
Managing Partner, Hunter Consulting
An essay from the book Leap of Reason,
which is available in full at leapofreason.org

Along with many others who work in the nonprofit sector, I believe
that most claims about nonprofit organizations’ ability to deliver
results as promised are unsupported by credible evidence. Indeed, I
think it is fair to say that the sector suffers generally from a pervasive
case of unjustifiable optimism—by which I mean over-claiming non-
profits’ effectiveness while under-measuring their performance.
Yet, paradoxically, many nonprofits in fact are over-measuring.
They are, as has been noted by many observers, suffocating under the
crushing weight of data—data they collect frantically, often resent-
fully, and use mostly to satisfy their diverse funders . . . but for little else.
So, to ask the famous question, what is to be done? Is there a way
for nonprofit organizations to navigate between the serpentine Scylla
of unsupportable optimism and the engulfing Charybdis of mind-
numbing over-measurement? Yes there is. In a nutshell, the answer
is to develop robust theories of change that serve as blueprints for
achieving specific results in well-defined domains—that is, to make
their strategic visions operational.
Making Theory of Change a Practical Reality
To simplify the matter a bit in this short essay, a theory of change
for social service nonprofits consists of a series of “if  then” state-
ments that add up to a prescription for the design and management
Using a Theory-of-Change Approach to
Helping Nonprofits Manage to Outcomes
by David E. K. Hunter, Ph.D.
99

of an organization and the services it delivers in order to help the
population(s) it targets achieve key, socially meaningful outcomes.
It’s worth emphasizing that any theory of change can be useful
only if it is tailored to serve a clear purpose. For example, if the object
is to support the design, implementation, and evaluation of a new ser-
vice program (say preventing drug and alcohol abuse among teenag-
ers), a solid theory of change most likely will focus narrowly on issues
of target population, program/service elements, dosage and duration
of service utilization, and outcomes. But if the organization is farther
along and the purpose is to help it to deliver current programming
more broadly and sustainably, then a useful theory of change will need
to expand its scope: It will need to address not only program issues,
but also organizational and financial matters.
I have developed a four-day approach to helping nonprofits
develop theories of change tailored to their specific ambitions and
needs. I insist on working with vertically integrated teams consisting
of representation from the board, executive leadership, mid-level
management, and a sampling of front-line staff. In these workshops
we review in great detail the organization’s mission; goals; objec-
tives; target population; targeted outcomes; key indicators for man-
aging performance and assessing success; organizational capacities;
the degree of alignment among its constituent parts (e.g., multiple
programs, multiple sites); data gathering and use at all levels of the
organization to manage performance; and systematic efforts to learn
from performance and understand whether the organization’s efforts
are achieving outcomes as intended. I work to help the group achieve
consensus on all these matters, and where this is not possible, to have
the executive director commit to a fully transparent process for mak-
ing an executive decision.
When successful, these workshops have two results: (a) an out-
put, consisting of a very detailed blueprint that shows not only each
step the organization will be taking to achieve alignment with its mis-
sion but also each step it will take to manage at high levels of per-
formance, effectiveness, and efficiency; and (b) an outcome, in that the
Leap of Reason
100

organization moves to a new level of clarity about its mission; high
transparency regarding its operations; substantial alignment among
its various operational units behind the achievement of its mission,
goals, and objectives; a deeper and more realistic understanding of its
resource needs; a new view of accountability for results; and a highly
focused, streamlined approach to gathering and using performance
data to support the achievement of success.
For example:
}
} Our Piece of the Pie (Hartford, CT) realized that its legacy pro-
gram of elderly services and its open-enrollment daycare center
bore no relation to its mission to help inner-city, low-income
young people successfully transition to adulthood. It decided to
limit daycare access to teenage mothers and redesigned elderly
services as a social enterprise providing stipends and work-
readiness training—both dedicated to helping young people in
its case-management program.
}
} Juma Ventures (San Francisco, now replicating in San Diego)
decided to pull back its early growth efforts in order to deepen
its target population to include first- and second-year (low-
income) high school students (because starting, as it had, with
third-year students could not provide sufficient program dos-
age and duration to assure the attainment of its educational
and work-related outcomes) and implement intensive case-
management services.
}
} Congreso de Latinos Unidos (Philadelphia) serves individuals
and families living mostly in the city’s North End and other
predominantly Latino neighborhoods. In the theory-of-change
workshops, Congreso consolidated some sixty semi-autono-
mous, contract-driven programs with an aggregate of several
hundred outcomes into a core case-management program with
101
Essays: Using a Theory-of-Change Approach

three key outcomes (health, education, and employment). The
old programs became specialized services; clients develop indi-
vidualized service plans and “pathways” through the system as
their individual needs dictate. In other words, Congreso moved
from being “program-centric” to being “client-centric.”
}
} Summer Search (a national organization headquartered in San
Francisco) significantly clarified its target population; revised its
ways of talking and working with teens; and abandoned some
legacy practices that could not survive rigorous scrutiny.
}
} The Center for Employment Opportunities (New York, NY, and
now replicating upstate) helps prisoners transition into employ-
ment upon their release. As part of developing its theory of
change, the organization studied its participants and found that
its success with young adults (age 18–24) was much lower than
with adults—and as a result built youth development practices
into its programming for its younger clients that increased
its effectiveness with them. A recent, rigorous evaluation has
shown that the organization significantly reduces recidivism.
}
} Roca (Chelsea and now also Springfield, MA) scaled back its
service capacity for several years to rethink and codify its use of
“transformational relationships” and allocate its resources more
effectively to help gang- and street-involved young adults leave
violence behind and gain sustained employment.
While it is essential that nonprofits develop theories of change, this
is just the first step. To become high performing, they must implement
(build) what is called for in the blueprint. In general, it takes anywhere
from three to six years. In the cases mentioned above, the organizations
went on to reconsider board responsibilities; rethink fundraising strat-
egies and goals; redesign organizational structures; deepen manage-
ment capacities; introduce new HR systems with clear accountability
Leap of Reason
102

for results; and design and implement performance-management data
systems that capture who gets served, the delivery of all elements of pro-
gramming as codified, monitoring of service quality, appropriate service
utilization, and the achievement of outcomes.
Are You Ready for Change?
Is this theory-of-change approach suitable to all nonprofits? No! In
my experience there are a few indicators that a nonprofit is ready
to undertake this kind of work, all of which must be present for the
exercise to yield the kinds of results I have described:
1. Executive leadership. The executive director must have
arrived at the view that the organization may well not be deliv-
ering what it promises, and also must find this situation intoler-
able (and hence be ready to make very tough decisions). By the
way, contrary to the views held by many, I have never seen a
board that has driven the commitment to redesign a nonprofit
in order to become high-performing and effective.
2. Board support. The board must be willing to engage in the pro-
cess even though it recognizes that in all likelihood more will be
required of it as a result—especially with regard to fundraising.
3. Financial solvency. An organization must have a sense that it
is sustainable before it can participate wholeheartedly in such a
workshop. If it is struggling to pay its rent or meet payroll, it is
very unlikely that it will have the “space” to take a step back and
wrestle with fundamental issues.
4. Organizational culture. The organization must have a strong
and widely shared sense that it needs data to manage well
and work effectively—even if, so far, such efforts have been
unfocused, funder-driven, burdensome, and mostly useless in
people’s daily work.
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Essays: Using a Theory-of-Change Approach

Conclusion
Bring up performance management with many nonprofit leaders and
you’ve got a good chance of watching their eyes glaze over or widen
with fear and loathing. Performance management conjures up the
worst dehumanizing practices of the corporate sector and reeks of
data gathering run amok.
But this need not be the case. If a nonprofit really knows what
it is doing and why—if it has a theory of change that is meaningful
(to key stakeholders), plausible (in that it makes sense to stakehold-
ers and key experts), doable (within the resources and capacities of
the organization and, perhaps, its strategic partners), assessable (with
measurable indicators of progress and success), and monitorable
(with well-articulated implementation and performance standards),
then designing simple, useful performance metrics really isn’t forbid-
dingly hard, and managing to outcomes can be a reality.
Those who depend on nonprofits in order to overcome struc-
tural and individual obstacles and to improve their lives and pros-
pects deserve no less.
Leap of Reason
104

Using a Theory of Change Approach to Helping Nonprofits Manage to Outcomes

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