Selecting charities on the basis of good impact reporting

 

NPC

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Tris Lumley

Tris Lumley

When the Guardian and Observer 2010 Christmas Appeal launched at the weekend, I had two reasons to celebrate. The first was that the funds raised will go to ten great charities working with young people in the UK. The second is that New Philanthropy Capital (NPC) helped select these charities by designing and testing a new application process. That process aimed to select charities that were really good at communicating their impact.

An application and screening process may not seem particularly exciting or revolutionary at first glance. But my excitement stems from the fact we were trying to come up with a new answer to the question: how much do you need to know about a charity to decide whether you should support it?

Over the years, NPC has developed a thorough and detailed approach to charity analysis, which we have published in our Little blue book. Using this approach, we have calculated that it takes us around 10 days to analyse a charity.

But what if you only have hours, rather than days? Using NPC’s full analysis process, we would have spent 13 years assessing the 337 applications to the Guardian appeal. We might have come up with excellent analysis, but it would have been a little late for Christmas!

Which is where the new application process comes in. In 2009 we started looking in more detail at what you can learn from a charity’s reporting and communications, following our takeover of the donor advice website Intelligent Giving. The result of this thinking was a new, simple framework that assesses how good charities are at reporting on their impact. It looks at how well charities answer five key questions:

  • What’s the problem you’re trying to address?
  • What do you do to address it?
  • What are you achieving?
  • How do you know?
  • How can you improve?

The framework was first tested in NPC’s report Talking about results, which assessed the reporting of 20 of the top 100 UK charities.

When the opportunity arose to work with the Guardian on this year’s appeal, this framework seemed like an ideal starting point for assessing applicants. We screened applicants on their answers to the five questions, with detailed and objective criteria for what we were looking for. High-quality evidence, for example. Our shortlist of 21 was then considered by a selection panel.

Critics might say we selected charities that can tell a good story, not necessarily those that are most effective. But just as good corporate reporting gives a strong indication of whether a business has a clear strategy and is well run, so good impact reporting indicates whether a charity has clear goals and data with which to measure its progress towards these.

In the end, there were some interesting results. NPC was surprised that a number of charities we knew well for their focus on measuring the impact of their work didn’t get through the screening – they seemed complacent about their impact and didn’t give us the evidence we would expect. Others previously unknown to NPC put in strong applications and made us want to know more about them.

When people pick up the newspaper, read about the charities and give generously, they won’t be thinking about the analysis that’s gone into choosing them. One of the things we’ve learned at NPC is that donors don’t often consciously seek evidence of impact.

Having an analytical process behind the scenes of a moving and inspiring appeal will hopefully provide the best of both worlds. People will feel motivated to give, and donations will go to charities where they can make the greatest difference to young people’s lives. A real meeting of the head and the heart.

Tris Lumley is Head of Strategy at New Philanthropy Capital. For more information on NPC’s work and the Guardian appeal go to: http://www.philanthropycapital.org/how_we_help/big_ideas/guardian_christmas_appeal_updated.aspx

 

Tagged in: Charity analysis Guardian Christmas appeal New Philanthropy Capital


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