New survey finds impact measurement can help to improve services

Almost two-thirds of funders aren’t perceived to build evaluation support into funding, by David Pritchard

Today, the charity sector faces huge challenges in responding to demands to deliver more public services to vulnerable people, whilst a difficult economic climate puts income under pressure. The role that impact measurement plays within charities cannot be separated from coping with these pressures; essentially, doing more with less. This is why we have produced Making an Impact, the first representative survey that seeks to understand what is actually happening in impact measurement and what charities find are the pros and cons.

The survey presents a wealth of information alongside new thinking and insight that we hope will provoke further research as well as action. One of the most intriguing conclusions is that while charities come to impact measurement mainly for funder reasons—as a funding requirement or to receive more money in the future—the real benefit is that it helps them to improve their services. Like so many of us in so many aspects of our lives, it’s as if they have to be cajoled into doing something that is good for them in the end.

What we have found is in many ways heartening to those who believe measuring impact is essential for charities to be effective and achieve their true potential:

75% of charities say they measure some or all of their work, and nearly three quarters of these have invested more in measuring results over the last five years.

52% of charities that have increased their measurement efforts say they did so to meet funders’ requirements, and 22% because their board or leaders prioritised measuring impact.

Although most charities have been driven to invest in measuring impact by funding requirements, they say the main benefit has actually been improving services.

However, there are also challenges:

25% of charities say they do not measure their work at all. Small charities are less likely to measure impact than their larger counterparts—nearly half of charities below £100,000 in income do not measure at all.

Funding is seen to be the greatest barrier—nearly two thirds of funders are not perceived to build evaluation support into their funding.

The report contains fascinating detail, but key themes emerge. The first concerns the role of funders. It makes sense that they play a crucial role in shaping charities’ behaviour. However, with great power comes great responsibility, and charities have told us that a lack of funding for impact measurement is the main barrier to further progress in this area. They are also concerned that funders generally have different reporting requirements, which are not aligned with the charities’ own and may in fact be designed to serve an internal purpose?

Interestingly, our survey found that funders vary hugely in terms of the evaluation they require from charities and the support they offer. Government funders are seen to have stringent requirements for measuring impact and provide funding for evaluation. Trusts and foundations are viewed as having less strict requirements, but are supportive and encouraging in their approach to funding evaluation. By contrast, corporate donors are highlighted for demanding impact measurement as part of their funding requirements whilst being less likely to provide funding for doing so.

A second trend identified by our work is that size matters: there are big differences between small and large charities when it comes to measuring impact. Very small charities are less likely to evaluate their results than others—almost half of all charities below £100,000 in income do not measure impact at all, compared with a quarter across the whole sector. We also found that they are more likely to feel there is too much pressure to measure results, and to struggle against the financial and technical barriers it might involve.

However, there are also issues at the other end of the scale. Whilst impact practices are more embedded and more advanced in larger charities, there are still those for whom impact measurement has not become routine. Of charities with an income over £10m, one in ten does not measure impact at all. Most large charities are, however, very positive about impact measurement, saying that it has helped improve strategy, services and effectiveness.

One of the key things we hope to gain by doing this report is a better understanding of what is impeding charities’ work around monitoring and evaluation. Although great strides have been made by the charity sector on impact measurement over the last five years, many barriers remain. Most charities believe the main barrier is a lack of funding to measure results, though a lack of staff skills and knowledge of how and what to measure feature prominently. When asked what would help to make progress, charities emphasised the need for funding, advice and analytical resources, and a wish to work with others in their field.

In short, Making an impact has found that whilst a huge amount of progress has been made around charity impact measurement, there is still room for improvement. The report includes recommendations for charities and funders, including the Government. We hope that they will all be able to learn from our survey and use the findings to improve measurement practices and boost effectiveness for everyone.

David Pritchard is head of measurement and Evaluation at New Philanthropy Capital.