Using Craft3’s new Theory of Change to Guide Our Investments and Measure Our Progress

In 2023, Craft3 launched our new 5-year Strategic Plan, “Capital, Relationships, and Voice: Investing in Communities and Change.” With that plan in place, we revisited and finalized a Theory of Change to guide us as we work towards fostering a Pacific Northwest that is thriving, just, and empowered. Our Theory of Change (see below) shows how our core strategies and target investment areas can create better outcomes for all. Capital, relationships, and voice are directed into target investment areas: housing, small business assets and growth, essential community services, and community climate adaptation. By focusing on our Pacific Northwest communities, we can make impacts at community, state, and regional scales.

The predicted outcomes for our capital strategy are: asset building and preservation; and building community stability and resiliency. These two outcomes will result in wealth creation.

The predicted outcomes for our relationships strategy are effective relationship networks empowering communities; and as a result of our voice strategy, we predict we will see marginalized voices elevated. The impact of our relationships and voice strategies together will be shifting power.

We developed this flow and logic model by looking at our business model and considering what it would take to accomplish our strategic goals. While our vision is multigenerational and will take collaboration with our communities, we believe our theory of change is possible and that this model while aspirational is achievable.

Craft3’s Theory of Change: How to get to our destination

Put simply, our Theory of Change is a visual depiction of how we think we can make an impact in our communities - it is the theory of how our work could make a change. Our Theory of Change helps us break down our strategy into a logical flow to show how we could get from where we are to where we want to be. It’s like planning a big vacation: ​​the strategic plan is like deciding where and when the trip will be and talking about what you want to experience there; a theory of change is like figuring out how you can save up for the trip, buying the train tickets, creating a packing list, and drafting an itinerary.

We use our Theory of Change to help us ensure our everyday work is strategic. We can look at the model and think, “Does this decision fit into our strategy?” or “How can I make sure this project moves us toward our goals?”  

We will conduct evaluation projects with the Theory of Change in mind to measure whether we are moving in the right direction and, if so, how quickly and efficiently we are doing so. Craft3 staff are doing incredible work every day. The Innovation and Evaluation Center team is tasked with using the Theory of Change and our strategic plan to take a step back, take in all the work that is being done, and help our colleagues decide whether to continue forward, adjust slightly, or go down a different path.  

​​​Targeting our investments and resources

This isn’t just talk. We make real, impactful decisions consistent with our strategy and on the basis of our Theory of Change and continuous evaluation of interventions and associated outcomes and impacts.  

For example, below you can see how our 2023 commercial lending was aligned with our strategic investment areas. In 2023, we made 141 commercial loans. Almost all of our loans were strategically aligned and 12 of those loans fell into more than one investment area.

‍Measuring our progress

To measure our progress toward our goals, we have developed internal evaluation metrics. These metrics keep us on track and allow us to monitor trends in the data. For example, we track the number of our loans that create new housing or improve existing housing in order to align with our key investment area - housing.  

We revisit these metrics periodically to ensure we are measuring the right things in the right way. We aim to be flexible so that we do not become “stuck in our ways” and can adjust as we learn more about this work. For example, if we conduct an evaluation project and determine that one community considers financial health to look one way and another community thinks about that completely differently, we would consider measuring multiple indicators of financial wellbeing.

Our ultimate goal is to be able to look at the work we do and be able to say and show, confidently and with data backing us up, that our work is driven by mission and is moving us toward a better Pacific Northwest for us all.  

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