Impact measurement – what charities and donors need to do

 

Fiona Halton

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Fiona Halton

When we interview people wanting to give skills to charities, they often mention a particular cause that has touched their lives in some way: the entrepreneur whose sister died of cancer, the chief executive who wants a level playing field for young people because they had struggled so hard to get where they were. And then, having said this, they almost as frequently say ‘but I don’t mind what charity you put me with so long as I am making a difference’.

Pilotlight’s recent survey of philanthropists and business leaders found that in giving money or time, impact mattered to them almost as much as cause. Nearly 60% of wealthy donors told us that information about the impact a charity was having motivated them to give, while over 70% cared about the cause. We are seeing giving decisions being influenced by the head as well as the heart.

So what does this mean for the sector and the way we give?

We believe that all charities, however small, need to measure the difference they are making. Measurement can be quite simple and appropriate to size – no labyrinthine studies on return on investment necessary. By doing this charities can strengthen their relationship with funders. With impact measurement in place, charities can make the best use of ever more constrained resources and make the biggest difference to their beneficiaries. Having worked with over 300 charities in the last ten years, we have seen how help and advice on measuring impact enables them to connect better with their current and future funders.

But donors can also play their part by being more vocal about what information they want from charities. We saw donations to charities fall by 20% in 2011-12, according to a recent NCVO/CAF report, making it even more important that the relationship between charity and funder works. The donor wants charities to hold their work up to the light so they understand the difference they are having, making measurement even more vital. ‘It’s very easy to write a cheque and give to a big charity but I think you need to do your homework when it comes to giving and really find out where you will have an enduring impact’, says Colin Temple, Managing Director of Schuh and joint founder of the Schuh Trust. ‘At the trust we look for small charities that may be struggling to get funding but know that their project will make a real difference.’

The charities we work with are sometimes worried about putting measurement in place. They fear it. But what we see is that when a charity measures what they do, they end up celebrating their work. And donors appreciate them more because they have a greater understanding of their work. In fact, the closer and more involved a donor is with charities the more they give.

Nearly three quarters of the business leaders we surveyed said that engaging with charities has increased their appreciation of the work the voluntary sector does. ‘Stepping away from the corporate world into this world has been a humbling experience for me and it puts everything into perspective going back into the workplace’, says Pilotlight member Jane Drysdale.

A surprise to our donors is how much their close involvement with charities gives back to them. According to our survey, 90% of people engaged with a charity like Pilotlight to ‘give something back’. But nearly all of our donors (88%) find that the experience has enhanced their own learning and development as well. Working closely with a small charity means they are forced to think outside the box – they can’t just tell charities what to do, they have to coach and mentor them. The business leaders I talk to are always surprised at how much they learn.

If we get the engagement between charities and donors right, it can lead to a very long and successful relationship. We often find that once people start working with charities it leads to an increase in their giving of both time and money. Indeed, our survey shows that after becoming involved with charities nearly 40% of people increased the amount they gave and one in five are in the process of becoming trustees. Far from putting them off charities, impact measurement and involvement with the voluntary sector meant they had the confidence to do more.

Fiona Halton is chief executive of Pilotlight

Tagged in: Charity analysis Impact measurement


Comments (3)



Christian Meyn

While measuring impact may be difficult at times, explaining your theory of change, or impact model, should be achievable for any impact-orientated NPO. To this end, a consortium of German funders, Venture Philanthropy investors, intermediaries such as Ashoka, and scientists has developed the Social Reporting Standard (SRS). The SRS provides a comprehensive, yet easy-to-use framework for describing your organisation and its achievements in a way that allows donors, investors, and volunteers to understand the difference you intend to make. An English translation of the Standard and examples of annual reports based on the SRS can be found at http://www.social-reporting-standard.de. The work is supported by the German Government and the Vodafone Foundation, and the Standard is adopted by an increasing number of funders and NPOs in Germany.


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