Charities and Not-for-profit

Impact in action

Charities link impact with strategy, culture and governance

At a time when global charitable giving is down, strong governance and strategy are more vital than ever. Charities recognize that being able to measure and demonstrate impact effectively is integral to a clearly-defined mission. 

Indeed, charity leaders we interviewed were comfortable with the idea of moving away from simply measuring outputs towards a more comprehensive evaluation framework. Views from charities around the world  [ 1408 kb ]

 

Addressing the challenges of measuring impact effectively

Charities are united in their belief that impact measurement is vital and are looking for ways to improve how they do it. But amid a complex funding and stakeholder ecosystem, a range of barriers to measuring impact exist.

Here, we set out three core challenges and offer ways to tackle them.

Challenge 1: Deciding what to measure

Recommendation #1: Don’t tackle too much at once 

Charities we spoke to agreed that sometimes focusing on less is actually more. Johnny Misley at the Ontario Soccer Organization explains: “Many [impact measurement] plans that I have seen fail were because they are trying to do too many things.”

To give yourself the best chance of success, pick specific areas to target for impact measurement. Attempting to measure the impact of everything all at once is likely to lead to ineffective results.

“You cannot do it all in one go. Start small, but make sure it ties back to your strategy. Pick the one or two programs that are most critical and assess whether they are achieving their required impact—these will probably be the ones you already have the best data on. Work on your methodology until you have it right, then take those learnings to the next couple of programs. It really is a case of learning
on the job.”

Simon Hancox, Partner, Grant Thornton Australia

Challenge 2: Gaps in skills, resources and funding

Recommendation #2: Conduct a skills / resource gap audit

Carry out an honest assessment of whether investing in technology, seeking third-party support, hiring more staff or training existing staff could improve your current impact measurement capabilities.

Consider the role of volunteers. Typically, these are people from the local community who want to give something back. Charities with large volunteer bases often struggle with impact measurement because, while these volunteers have some skills and attributes—such as enthusiasm and commitment—they may not have formal training in information gathering.

Look at a potential skills audit for your board and management too. The following questions may be a useful starting point.

  1. Does your board have an impact expert on it, as well as a lawyer and an accountant?
  2. Is your impact lead (or equivalent) senior enough in the leadership of the charity or just part of another division?
  3. Do you dedicate resources to helping teams design and manage their projects for impact as well as just measuring them?
Challenge 3: Impact timeframes

Recommendation #3: Agree on parameters and stick to them

Get a group of people together to determine where you are in terms of measurement. For this to be most effective, include people who are responsible for information gathering. Align what you are doing with your strategy. Then ask yourself: “What are the key outcomes that would demonstrate the strategy is working?”

This is also the stage to understand and incorporate targets or key performance indicators (KPIs) that donors may request or even require in exchange for funding. If these do not align with your mission, now is the time to question whether your mission needs to change or if the demands that come with a particular stream of funding are too great.

Specify what exactly you will seek to measure, across what period of time. Good impact results come from working in a smarter way from the beginning of the project. However, make sure your stakeholders understand the genuine outcomes that support your mission may take years to come to light.

Telling the impact story

Measuring impact is only one challenge. Once charities have results, they are then faced with the task of sharing them with audiences effectively.

The views of charity leaders reveal that communicating the impact story is a challenge the whole sector is grappling with. Three main challenges emerged.

Challenge 4: Analyzing what you have measured

Recommendation 4: Verify your results before you share them

Sharing results that can be picked apart or undermined could do more harm than good. Explore who is best placed within your teams to carry out the verification process.

In addition, explore the best method and timeframe for analysis of results. Information gathering and some analysis will need to take place as a program is running. But consider how and when to bring in the person or people who verify, analyze and make sense of the results.

“There is often a blend of quantitative and qualitative evidence to analyze, both of which will likely play a role in telling your impact story. Consider whether you have people trained in analysis of both forms of results to draw the best conclusions and seek training or extra support, if not.”

Brent Kennerley, Partner, Grant Thornton New Zealand 

Challenge 5: Getting buy-in from your employees

Recommendation 5: Empower your team members to act
as advocates

A common thread in our conversations was the need to get the right people to sell the impact story—people with passion, who believe in it. According to Catriona Dejean at Tearfund in the United Kingdom, “You need strong people in the organization who are driving impact and can sell it to boards.”
As well as deploying passionate management teams to engage with boards, empower your staff to act as advocates. The most effective way to do this is to involve them in the early stages, when you are setting the parameters for what you will measure and how.

As Simon Hancox, Partner at Grant Thornton Australia, explains, this will also help install a new wave of charity workers and volunteers with the purpose they crave: “Frontline support staff are the ones collecting the information and will know how it all fits together. If they do not think it is meaningful, they will not invest their time tracking and gathering information because they won’t see the value in it. Their buy-in is essential. What’s more, a new generation of volunteers want to know that they are making a difference and donating their resources or time for a good reason. Securing buy-in from staff is becoming more important.”

Challenge 6: Tailoring your story to different audiences

Recommendation 6: Don’t be afraid to tell your story
your way

There is no doubt that the medium or the format you use to communicate to your board or an institutional investor, compared to public supporters, may be different. But the thrust of the impact story should include the following core components:

  1. We believe our mission is crucial because…
  2. You have provided money/time/support to help us achieve our mission by…
  3. These are the outcomes we have achieved…
  4. This is how those outcomes support our mission...

“Have confidence in your story and tell it in a way that aligns with your mission. There are a multitude of audiences out there and while you may use different methods to get the story across, the building blocks of the story shouldn’t have to change.”

Furthermore, when telling your story, do not shy away from pointing out where your impact has not been as significant as you had hoped. This information will be useful in setting future priorities.

Simon Hancox, Partner, Grant Thornton Australia

deryck_williams

“ The challenges to impact measurement we have identified are profound and potentially damaging if not addressed – or at least discussed. These can be difficult conversations for charities to have. But doing it speaks to a mission, culture, and ethos that recognizes not everything is perfect. There is always room for improvement.”

Deryck Williams, Partner, Grant Thornton Canada