How the system needs to change and how an organisation’s actions are presumed to lead to or unlock key parts of that transformation. Describes how and why a particular intervention or strategy leads to a specific set of outcomes or long-term goals. Helps to clarify the underlying assumptions, causal pathways, and the expected results of an initiative.  In a Theory of Change, resources (inputs) are utilised to execute specific actions (activities). These actions produce immediate, tangible results (planned outputs). These outputs lead to short-term and medium-term changes (desired outcomes), which ultimately contribute to significant long-term benefits (desired impacts). The assumed relationship outlines the progression from inputs to impacts, ensuring each step effectively builds on the previous one to achieve the overall goals.  Example: In an environmental conservation program, funding, conservation experts, and community volunteers are utilised. These inputs support reforestation projects and community clean-up events. The immediate outputs are trees planted and areas cleaned up. These activities lead to improved local ecosystems and greater community engagement, which eventually enhance biodiversity and create sustainable natural habitats. Theory U