Imagine you are a senior executive of a successful charity which supports homeless people with accommodation and meals. Your charity’s shelters support hundreds of people in your own town and in towns across the world. The shelters are busier than ever, however you measure impact by how long it takes an individual to get back on their feet and into a stable job – it’s now less than four months compared to more than six months at this time last year.
But your donations and funding are at an all-time low. Your leadership team have concerns that achieving your mission to help the homeless in future may be impossible. You also have concerns over how the charity can be run more efficiently and effectively if resources are stretched – and wonder how to kickstart those key projects you have planned for 2019.
Your mission, should you choose to accept it, is to put impact measurement at the heart of your work.
A unique impact journey
Charity leaders are increasingly identifying with the situation explained above despite each charity being on its own unique impact journey. Global charitable giving continues to decline. There is economic uncertainty in many regions of the world. The general public in many countries are more sceptical than ever when it comes to trust and confidence in charitable effectiveness and efficiency. And media channels are so crowded with conversations that it’s a fight to tell your story and be heard.
AN IN-DEPTH LOOK AT IMPACT IN ACTION
How charities worldwide can measure impact to drive their mission
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IMPACT IN ACTION
Why measuring impact is vital for charities
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This raises some timely questions for charities. First, of those working for social change, how is the landscape being altered as a result of new entrants in the market? Second, what is the best way to maximise opportunities created by measuring impact well? Third, how do you determine the best impact measurement framework to help you to stand out from the crowd, articulate your successes, increase donations and secure funding to achieve their missions?
The answers to these questions can be used to communicate with the multiple stakeholders a charity needs to consider. Their board or senior leadership, employees and volunteers, donors, funders and the general public all rightly hold charities to account for how money is spent and what progress is made.
People want to ‘do good’
Charities are often the default source of support for worthwhile causes, but there is no guarantee that this status will last forever. Charities do not own charitable action. As Baroness Stowell, Chair of the Charity Commission for England and Wales, recently said, “Charities do not have a natural, eternal monopoly over the channelling of our altruistic impulses.” While she may have made this point in relation to the UK, there is a common understanding across the sector that it is not a question of geography – it is a global challenge to communicate, understand and deliver better.
Today there are many people and organisations looking to achieve an improvement in society and alleviate its injustices, which of course is good news for beneficiaries. Private businesses, social enterprises, online funding platforms, and individuals making direct donations to those in immediate need, all overlap into the area charities tend to operate in.
The way success is measured and reported by these different entities varies greatly, but with a common theme of sharing positive stories about impact in the real world. Crucially, there is the temptation to report success over short timescales, even if the greatest impact might occur over years or a decade. In a world of social media and 24-hour headlines, it’s easy to be led astray. Having effective evaluation capabilities is about understanding your impact over months, years and even generations.
From organisations with a stated purpose through to emerging specialist Benefit Corporations who strive for both profits and for the betterment of the world around them, it is clear that an increasing number of corporations are looking to have a positive social and environmental impact. One prominent example is the private sector-led IMPACT2030, backed by the United Nations. The project seeks to deliver on the UN’s Sustainable Development Goals from ending world poverty to dealing with climate change, by pooling the resources, skills and experience of the corporate world.
In September 2018, Grant Thornton International Ltd CEO Peter Bodin was announced as chair of the IMPACT2030 board. Peter Bodin said, “If the private sector can engage people, its most valuable asset, they can focus their collective energy on achieving the UN’s Sustainable Development Goals. This will represent true progress towards a better and more sustainable future for all.”
Using employees or staff to help advance these global goals is an approach not just being driven by large corporations. Research into employee engagement has shown that as many as three-quarters of Millennials would take a pay cut to work for a socially responsible company. And what this generation may currently lack in disposable income is offset by their desire to work and volunteer for charitable causes. Interestingly, as millennials are expected to make up 35% of the world’s working population by 2020, they could overtake Baby Boomers as the most generous generation.
Charitable causes, and those they help, are benefiting from additional support in the form of money, goods or staff provided by businesses and a great number of large corporations are taking part. Through the company they work for or through fundraising platforms like Go Fund Me, people can now donate directly to their chosen cause.
We know that Millennials value transparency and information very highly. Yet many online funding platforms are often less forthcoming about outcomes, and not all large corporations share regular progress updates. Charities telling their story, reinforced by factual and clear information about the impact they are having, could be one way to engage the Millennial generation.
Turn scrutiny into opportunity
In a world with greater overlap between charities and other organisations having an impact on the same group of beneficiaries, there is a lot to learn from each other.
By turning increased scrutiny into opportunity, charities can better fulfil their mission. By putting impact measurement front and centre, charities can reap the benefits.
As we have all seen from the various stories in the press over the last couple of years, charities are under the spotlight more than ever before. This is not necessarily a bad thing. In fact, charities can use this as an opportunity to assess where they are on their impact measurement journey and take stock of where their priorities lie.
Scrutinising the way impact is measured and the trends from results over time can help inform decision-making by highlighting risk management issues. This in turn provides information which empowers trustees to hold their executive team to account more effectively and help the charity drive positive change by staying on the right course.
Charities have an opportunity to meet the transparency and accountability needs of their donors, funders and leadership teams as a point of difference. By building impact measurement into projects from the outset and sharing progress, charities can also work toward achieving their goals with a solid foundation of metrics. Clear measures lead to a better business case and ultimately stronger funding and donor relationships. Charities that don’t do this risk losing the backing – financial or otherwise – of vital stakeholders.
Adapt an impact measurement framework to fit your needs
All charities can use impact measurement as a way to help fulfil their potential. It is important to remember that measuring impact is scalable and can be built up and reviewed over a period of time – it does not have to be an onerous process.
Charities that are unsure where to start should make the most of their existing resources and perhaps start small. They can then consider what additional support they need to roll-out their impact measurement initiatives more widely, whether that’s reviewing existing parameters or recruiting employees with specialist skills.
Grant Thornton and the University of Western Australia have conducted research designed to help charities do exactly that. ‘Outcome: Research into Practice’ offers a ten-step process for charities to consider. The key stages are:
Decide what success looks like: what are the short, medium, and long term goals?
Align a project’s objectives to the charity’s wider strategic plan
As the charity advances on their journey, establish a reporting framework
Decide who is responsible for collecting data, analysing it and reporting
Consider assurance as part of the governance process including who is responsible and over what time frames
This process is a good basis which charities can tailor to meet their needs to suit their unique position. With more variety of individuals and organisations participating in the charitable giving area, and important demographic and cultural shifts taking place, charities can better achieve their mission by establishing an impact measurement framework. Whatever stage your charity is at, impact should be at the heart of your work.
To read more about the steps your charity can take to get started on the measurement journey, visit National outcomes measurement program or contact your local Grant Thornton Not for Profit team.