The word ‘impact’ conjures up everything from passion to frustration, confusion to hostility. It means different things to different people. Many equate it with impact measurement – a rather narrow focus on how to measure the social impact of a particular activity or intervention. But what does it mean from a funder’s perspective?
This question has played on my mind for most of the nearly eight years I’ve been working at NPC. As an organisation committed to helping charities put impact at the heart of their work, we’ve tried to see how we can help all sorts of funders – from philanthropists to foundations, corporates to government – to create greater impact.
But it’s clear from recent discussions with foundations that there are still many unanswered questions. A group of foundations participated in an Impact Summit held by NPC and Views at NESTA in September, and some clear key issues emerged from the debate.
For a start, how do we think about foundations’ full impact – not just from their grantmaking, but also their wider role beyond providing grants? This can include everything from framing an issue to influencing policy, from building the capacity of grantees to social investment.
How do foundations most effectively help grantees to increase their focus on impact? Should they use a ‘funding plus’ approach, as outlined in recent reports by IVAR and NPC? Should they try to embed impact through their grantmaking processes, encouraging people to focus on outcomes in their applications and reports? Should foundations be flexible in what they allow grantees to report, or perhaps recommend approved impact measurement frameworks and tools?
One thing is very clear from the work we have been doing since that summit: funders of all types have a key role to play, as they create incentives for charities to measure their impact through the approaches they choose.
Over the last decade, trust and foundation fundraisers and major donor fundraisers have become increasingly conversant in the language of outcomes. Often they have responded to a demand from funders to communicate the results of work they might fund. These fundraisers can then become change agents within their organisations, asking difficult questions of their programmes teams that result in a gradual shift towards greater emphasis on outcomes.
On the flipside, funders can sometimes hinder charities from measuring their impact usefully and effectively. Charities that have to report to multiple funders often spend a disproportionate amount of time under many different incompatible regimes – as much as 10% of a grant can be spent on reporting.
So how might foundations, philanthropists, government and other funders align these incentives to offer better support to the organisations they fund, and help them increase their focus on impact? Some of the potential solutions are laid out in the paper we have produced following our Impact Summit, Inspiring impact, which aims to kickstart an exciting, ambitious and collaborative programme of change.
More than a dozen organisations, including the Association of Charitable Foundations, the Social Investment Impact Measurement Group, the Big Lottery Fund and Pears Foundation have already committed to take the programme forward. It will work on five main areas – impact leadership, shared measurement, data and tools, coordinating support, and working with funders.
In this last area, we hope to make some rapid progress over the next 12 months, emulating best practice like the excellent Evaluation Declaration developed by the Scotland Funders’ Forum. By bringing together a community of funders committed to exploring what impact means for them, and how they can create more of it, we hope to build collective leadership and a group to provide mutual support and experience.
If you’re interested in joining that group, I’d love to hear from you. Take a look at the report and its proposed plan of action, tell us what you think, and get involved. By working together, we hope to make the next ten years a decade of high impact, helping more funders and charities to make the most of what they’ve got.
Tris Lumley is head of development at New Philanthropy Capital. Email email@example.com
NPC’s report, Inspiring impact: Working together for a bigger impact in the UK social sector, is being officially launched at NESTA tonight. Nick Hurd MP will be speaking and Gareth Davies, head of the Office for Civil Society, will be chairing the event. Other speakers will include Dan Corry from NPC and David Emerson from ACF.