Good impact reporting helps beneficiaries, volunteers, and supporters understand and engage with a charity. It also helps staff and trustees focus on results and work to achieve their vision.
A charity that can establish and explain its impact will have a strong foundation both for communicating its work, and for managing it to achieve the greatest possible impact.
Simplistic v realistic
While charities, fundraisers and funders have become used to using a simplistic, linear model to show what a charity does and the difference it makes, like the example below to reduce obesity risk…
...the reality is that we live in a world of complexity, which looks something a little more like this...
...where influencing factors are not just the inputs of a single intervention but include multiple aspects of people’s lives such as media, social, psychological, economic, food, activity, infrastructure, developmental, biological and medical factors.
In a complex system, it’s impossible for an organisation to reliably demonstrate their impact – as it’s not possible to isolate ‘their’ impact from the influence of other elements of the system. Unless you follow a jobseeker around with a clip-board for six months following your workshop, how will you know whether they entered long-term employment? How can you tell if it was your programme which made the difference, or a coincidental intervention? Trying to ‘demonstrate impact’ in a complex system wastes valuable resources and leads to gaming of the system to please funders. The goal becomes to hit specific targets rather than to focus on the end result. Many charities already know this but have ended up playing the outcomes game to secure and renew funding. Most charity leaders say that they would rather focus their time on delivering support to their beneficiaries and learning about what works best for and from them.
The grant-makers response
Funders, particularly grant-makers, are keen to use their funds to make the biggest difference they can. For them it’s about understanding what works and what the impact of their funding is. A significant group of strategic funders acknowledge the challenges around outcomes frameworks and impact measurement and are involved in research and discussions regarding alternatives. Some are indeed leading the way in changing how funding is distributed and monitored.
Through their research, ‘Exploring the new world’, Collaborate learnt that there is significant momentum for change:
• Organisations who work on the ground want to provide bespoke responses to people’s strengths and circumstances;
• Public sector commissioners want to help (local) systems produce better outcomes – they want to commission differently;
• Funders want to address the systemic causes of social problems – they want to fund differently.
An increasing number of funders and commissioners are recognising this e.g. National Lottery Community Fund, Tudor Trust, Lankelly Chase Foundation, Esmée Fairbairn Foundation, Blagrave Trust, Cripplegate Foundation, Barnwood Trust et al. It is quite possible that in five years’ time funders won’t be asking organisations to play the impact game.
“Welcoming the knottiness of the world feeds into a more equitable relationship between funders and communities – valuing learning and improving, rather than proving; asking what matters, not what’s the matter; and putting people in the lead, instead of prescribing the solution.”
Dawn Austwick, Chief Executive, National Lottery Community Fund
“The Tudor Trust tries to fund in a relational way, spending time getting to know those we want to support and building an understanding of the world they are working in. We trust the groups that we fund to know what is needed in their communities and aim to build an open, straightforward relationship that helps them in their often difficult work. Some time ago (2006) our trustees decided to stop focusing on restrictive funding programmes. They wanted to recognise the complexity of peoples’ lives and organisations’ needs, trying to respond in a way that felt appropriate.”
Christopher Graves, Director, Tudor Trust
“From our survey of grantees in 2016 we heard a clear message that funders are putting unnecessary restrictions on organisations they partner with that are detrimental and don’t recognise the complexity voluntary sector organisations are working in, and the lives of the young people they work with.”
Earning trust and demonstrating learning
So, what next?
There is a role for impact measurement – it is a tool for organisations to learn about and improve their practice. They can use impact data (amongst a range of other feedback) as reflection mechanisms. Increasingly, this is what funders will ask for – do organisations collect and learn from their data effectively?
Relationships between charities and funders need to be based on trust and learning. This will also support a shift to more funders offering multi-year unrestricted grants. Trust is the starting point for working effectively in complex environments, but it is not in itself enough. Trust is earned by those people and organisations who learn and improve, and in turn, trust frees those people and organisations to adapt their practice based on their learning. What are the reasons a funder should trust you? What is it:
• About your organisation?
• About your project?
Ways to gain trust can include your track record, a strong set of accounts, good governance and evidence of learning and improving. In a complex environment, learning is a continuous process. There is no such thing as ‘what works’, because ‘what works’ is always changing. ‘What works’ is a dynamic spectrum of learning and adaption.
We work with charities to ensure that they can gain and hold the trust of funders to make best use of unrestricted funds. We do this by helping them to create a compelling case for support by demonstrating strong organisational attributes such as sound finance and governance. To discuss how you can increase your core funding by responding to developments in impact measurement, learning and improvement, contact the team at firstname.lastname@example.org.
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