A theory of change is a planning tool that can help you review and identify the difference your organisation makes. Your theory of change will be unique to your organisation and can be presented in various ways.
It is a visual description of the change you want to happen, and the steps involved to get there. It should be a collaborative process that includes multiple perspectives (e.g. staff at different levels, trustees, other volunteers, beneficiaries, partners, etc).
Check out this fantastic resource by Superhighways on a rough guide to developing a Theory of Change.