Impact Reporting Takes Hold

Savvy donors are no longer interested in flattering self-portraits from charities. They want more transparency from impact reporting as the UK’s Celina Ribeiro tells us.

Donors are becoming more demanding. Charities can no longer hang ‘genius at work’ signs outside their doors and expect their supporters to wait patiently to be shown a finished masterpiece.

Organisations are being asked to show works in progress and any mistakes that are made. As a result impact reporting is becoming an increasingly critical component of a charity’s work. Fundraisers may well find themselves at the centre of a push for increased transparency.

The push for greater transparency from the funder side has gained steam over recent months.

In this spring, the Big Lottery Fund this spring commissioned a number of organisations to work to make impact reporting tools more widely available. One of them, Triangle Consulting, has just launched ‘Outcomes Star’, a free downloadable reporting system for charities on its website.

Also in June, Comic Relief announced impact reporting would become a cornerstone of its funding strategy for the next four years.

One of the UK’s leading advocates for impact reporting is New Philanthropy Capital, a charity that advises major donors and funders on how to give more effectively. The organisation plans to launch a well-being evaluation questionnaire in October, which will allow charities in specified fields to assess the impact their work has on their beneficiaries and benchmark their results.

Meanwhile, in the US charity rating website Charity Navigator is developing a system where it can measure and rank charities’ impact, in addition to financial responsibility, to help inform donor choices.

Power to the patrons

Oxfam’s Dr James Stevenson, a senior advisor on the monitoring, evaluation and accountability team, says he has seen rising demand for more first hand information.

“I wouldn’t say it’s indicative of a loss of trust on the donor part, but I think there is generally a greater curiosity about impact, certainly among people who are giving substantial amounts of money.

“The team that handles major donors is a team I often end up spending quite a lot of time with and I get some pretty articulate requests in from individual donors requesting sophisticated information about the impacts of individual programmes that they have given ear-marked funding to,” he says.

“I have only been at Oxfam for three years, but certainly in the last year or so I’ve had a greater number of requests.”

Oxfam has recently finished an internal review into its impact reporting strategy entitled Communicating Results.

As a result of the review, the organisation will publish evaluations of different individual programmes on its website for the first time later this year. The project evaluations will be released in addition to Oxfam’s traditional annual impact reports and will give supporters more regular and detailed analysis of the results of individual interventions.

The details of how the website reports will function are still being worked out, but Dr Stevenson says “the presumption is to publish unless there is an overwhelming security issue. That then certainly increases the level of transparency between Oxfam and the general public.”

Oxfam has been using six-monthly ‘monitoring reviews’ since 2007. The reviews require individual country teams to set their own measurement standards according to their particular situation. Oxfam uses logic models against which individual teams set their goals and measurements. Dr Stevenson says that as an unofficial guide, around 5 per cent of project spend goes towards evaluation and reporting.

Many critics of impact reporting suggest that it is something that can be easily implemented in charities with more simple aims, such as housing the homeless, but it is nigh on impossible for others whose aims are bigger or more complex. Oxfam is one such complex organisation, says Dr Stevenson, adding that impact reporting can work in any context, as long as it responds to the organisation’s specific needs.

“Oxfam works on poverty conceived as a multi-dimensional concept covering people’s livelihoods, people’s right to education, humanitarian responses, governance – the sheer range is vast. While there are certain principles [carried in reporting across the board] I would urge caution with having a system you can take off the shelf and embed in your charity.”

Bringing the abstract into focus

Implementing impact reporting is no straightforward task for the British Heart Foundation (BHF), an organisation which, like Oxfam, is planning on significantly increasingly the impact reporting information on their website this year.

BHF is currently undertaking market research to discover what kind of information its supporters want from impact reporting online, and last month published its first report on recent BHF-funded discoveries, titled Lifesaving Science.

While the charity has been increasing its impact reporting efforts for a few years now, Lifesaving Science marks the first time it has managed to put case studies together for medical research.

Jane Shepley, science communications manager at BHF, says the report reflects on both on clinical and basic research, but emphasises case studies “to really illustrate the human side of the research”.

“I think we’ve got about ten stories and four of the stories have a case study, all of which people have taken part in or benefited from research that we’ve funded,” she says.

“The report will be used quite widely. It will be sent out to some supporters and it will be taken to events, so if people are interested in our research they can read it. It’s a friendly, accessible, really brightly-coloured little booklet that tells them a bit more about us.”

Shepley joined the BHF in 2005 specifically to communicate complex scientific discoveries information to others within the charity. High demand for her services from fundraising and other departments meant that last summer the charity had to hire another person to support her.

Shepley has developed a library of resources including ‘research achievement documents’. The science communications team compile and log information about the various projects and programmes the charity runs across nine key areas, communicating with the people BHF has funded and translating their results into plain English for fundraisers.

“The aim of the research achievement documents is to put all our information into one place and chart what the BHF impact has been up until now. We then put that information into short, signed-off sentences that fundraisers can pick and choose from depending on their needs at the time,” says Shepley.

The achievement documents, she adds, are critical to making sure that in a complex and international field such as medical research the charity does not over-claim its impact. “But we do want to make the most of what we’ve achieved and report our impact accurately, in a way that is useful for our fundraising team,” she says.

Shepley says that fundraisers have told her research is a very popular topic with donors, however she warns other research charities not to plunge into reporting on their impact without fully understanding the logistics and costs involved.

“The research achievements documents, to be honest, are very challenging to put together and they can take a long time. Literally you’re searching for these tiny jigsaw pieces that have been produced by researchers across the UK for the last 40 years which are hidden in space and time.”

The effort for British Heart Foundation, however, is a long term one. Betty McBride, director of policy and communications, says that impact reporting is “here to stay”.

“In BHF that means we run a narrative line through all our communications, from annual reviews to social marketing ‘Z’ cards. We express what we were aiming to do, how we did it and what the outcome was, both long term and short-term.

“In our world, timescales for outcomes are often measured in decades rather than in neat annual review years and spending money on research that disproves a theory can be as helpful for progress as work with a positive result. So tell it to your donors like it is. Show how you are playing your part… talk about your role and the bigger picture.”

Mistakes make the masterpiece

While painting the bigger picture, a relatively young organisation has attracted acclaim for being as explicit about its failures as its triumphs.

The Fifteen Foundation, the charity started by television chef Jamie Oliver, last year released its warts and all five-year review.

In the report, published on their website, the organisation bared all about its short-comings and successes.

In the introduction, Fifteen’s director Liam Black writes, “This report is not a typical annual report. It is a warts and all look into the guts of Fifteen, celebrating what’s great about the place, but acknowledging too when and how we missed the mark.”

The report includes positive case studies, but also the stories of individuals who didn’t go on to be chefs or remain in employment at all. It includes admissions such as “for a significant number of young people, Fifteen did not work out for them” and “we don’t understand yet what drives this self-destructive behaviour [in some ex-apprentices]”. Critically, it also included a commitment to change that which did not work.

Penny Newman, chief executive of the Fifteen Foundation, tells PF the decision to be upfront with supporters, and the public at large, came naturally to the charity.

“We’re not going to pretend we’ve got all the answers and hopefully by sharing what’s worked and what hasn’t we’re helping our funders see more accurately how their donations are being spent.”

Donors, she says, “seem to like the ‘warts and all’ approach that we’ve taken… They don’t expect us to have all the answers.”

Following the overwhelmingly positive response to their frank social audit, Newman says that Fifteen plans to expand its impact reporting scope.

“It’s absolutely critical to show our impact. One of the learnings we have taken from our first social report is how we want to demonstrate our impact in a much wider context, as this report concentrated on the apprenticeship scheme, but there are other stakeholders that we impact,” she says.

Fundraising in the frame

With the push for impact reporting coming most loudly from the donor side, Tris Lumley, head of strategy and development at New Philanthropy Capital, says that fundraisers are in prime position to advocate a greater emphasis on impact – both within their own charities and to a broader audience.

“Fundraisers can be at the heart of the revolution because they are often the people tasked with communicating most externally,” he says.

“It is fundraisers responsibility to move donors away from asking questions about efficiency and about admin costs. Donors – whether they be retail donors or philanthropists or whatever – ask questions about administration costs because they are genuinely interested in making sure that their donation achieves the greatest impact it can… But they are asking the wrong questions because they are not being equipped to ask the right questions,” he adds.

Trumley argues that by advocating for, and implementing, an impact reporting strategy, fundraisers can lift themselves out of the silo in which they often operate. “It is fair to say that people can feel like fundraising is bolted on to an organisation. The charity is going to do what it’s going to do, and then it tells the fundraisers to go off and raise the money to do it,” he suggests.

“If you are really going to talk about your impact openly and honestly, fundraisers are going to be a core part of that and that’s going to draw them in closer to the strategy of the organisation and what it actually does.”

Communicating impact, according to Trumley, is an essential component of any impact measurement strategy. The NPC analyst argues that impact measurement is made of four components: actual measurement of what has happened; analysis; using the information within the organisation; and telling those outside about the findings.

“Often ‘impact measurement’ gets condensed down to just measuring,” he says. “From a fundraising point of view, the communication piece is really important.”

With large and high profile organisations like Oxfam, British Heart Foundation and Fifteen becoming more vocal and honest about their impact, Trumley believes that there may be a snowball effect, with other charities – perhaps pushed by their own fundraisers – deciding that impact reporting is no longer a ‘nice to have’, but an essential component of both their operation and communication strategy.

“What we know about fundraising is that people come up with a technique and a few early adopters try it. If the rest of the sector sees this stuff work then everyone wants to be doing it,” he says. “It is our hope that fundraisers in organisations that want to be at the cutting edge of reporting on their impact will see the impact that has had on their fundraising, and then the rest of the sector will get on board.”

Originally posted on Professional Fundraising; reposted with permission.