ActKnowledge were one of the pioneers of Theory of Change, and their website www.theoryofchange.org provides a good introduction, as well as links to worked examples and a ToC community. The description below is taken from that website.
A Theory of Change is a specific and measurable description of a social change initiative that forms the basis for strategic planning, on-going decision-making, and evaluation.
Theory of Change is both an outcomes-based, participatory method and a rigorous tool for planning, evaluation, and organizational capacity-building. A Theory of Change defines all building blocks required to bring about a given long-term goal. This set of connected building blocks – interchangeably referred to as outcomes, results, accomplishments, or preconditions – is depicted on a map known as a pathway of change/change framework, which is a graphic representation of the change process.
Built around the pathway of change, a Theory of Change describes the types of interventions (a single programme or a comprehensive community initiative) that bring about the outcomes depicted in the pathway of change map. Each outcome in the pathway of change is tied to an intervention, revealing the often complex web of activity that is required to bring about change.
A Theory of Change would not be complete without an articulation of the assumptions that stakeholders use to explain the change process represented by the change framework. Assumptions explain both the connections between early, intermediate and long-term outcomes and the expectations about how and why proposed interventions will bring them about. Often, assumptions are supported by research, strengthening the case to be made about the plausibility of the theory and the likelihood that the stated goals will be accomplished.
Stakeholders value theories of change as part of programme planning and evaluation because they create a commonly understood vision of the long-term goals, how they will be reached, and what will be used to measure progress along the way.
The methodology used to create a Theory of Change is also usually referred to as Theory of Change, or the Theory of Change approach or method. So ‘Theory of Change’ may mean either the process or the result.
Like any good planning and evaluation method for social change, it requires participants to be clear on long-term goals, identify measurable indicators of success, and formulate actions to achieve goals.