Funding Gap Prevents Community Sector From Measuring Impact

A lack of funding to measure social impact is preventing the community sector from knowing whether it’s making a difference, according to new research.

The report, from the Centre for Social Impact (CSI) at the University of Western Australia, found nine out for 10 community organisations cited lack of funding as a key barrier to measuring the outcomes of their work.

Co-author and CSI director Paul Flatau called the findings “staggering” and told Pro Bono Australia News outcomes measurement was essential to understanding impact and evaluating processes.

“Not for profits themselves, and, if you like, the funders, have as their mission to make a difference. Now, they need to know whether they actually are making a difference or not,” Flatau said.

“The most important reason for measuring your outcomes is because you want to know whether you’re successful in addressing your mission. So… boards of not for profits, not-for-profit staff, executives and the consumers, I think, all want to know ‘are we making a difference with these programs?’

“Beyond that I think there are important external drivers, so funders should know whether the funds that they’re applying to a particular initiative or program is working, and how well it’s working.

“Because ultimately in a resource-constrained world, we should know what the impact is of the dollar spend, and we should [say] ‘if it’s not working so well, let’s reevaluate and move our money into another way of doing this.’”

The report found while most not-for-profit organisations recognised the importance of outcomes measurement, prioritising funds was an issue.

“What’s happened in the past is that measurement has been put down the priority list so that people are saying, ‘look we’re in a constrained environment, we’re not getting quite the funds we need to run this program so therefore the greatest focus is going to be put on frontline service delivery.’ And you can understand that,” Flatau said.

“The difficulty we have with that kind of approach is we really are behind where we should be in terms of knowing the difference that we’re making.”

He said funders needed to allocate resources for outcomes measurement.

“First of all we would argue that it should be explicit in contracts that we will provide for funds for data collection and evaluation,” he said.

“What we know from this study is that direct outcomes measurement in contracts is relatively low. External grants for outcomes measurement specifically [is] relatively low.

“Now of course some not for profits are doing the outcomes measurement directly, and they’re often doing that out of general, internal sources of funds… which is independent of specific contracts, so we’re talking largely about fundraising or revenue raising from social enterprises and the like.

“They’re the ones that are being able to apply that money into outcomes measurement.”

John Berger, CEO of St Bart’s, a Perth agency assisting the homeless, welcomed the findings and said the organisation would work to secure funding for outcomes measurement.

“Outcomes measurement is important for all levels of the organisation – for workers to understand the change that they’re making, for the organisation to evaluate progress against its mission, and for funders to know what their money is getting,” Berger said.

“Our next goal is to have outcomes measurement recognised in funding contracts as a key activity in program delivery.”

In addition to funding for not-for-profit organisations, the report identified the need for infrastructure for data collection, standardisation of tools and methods, and collaboration.

“We believe that the underlying infrastructure of this is very much a matter of the key funder, which is government,” Flatau said.

“We would want to see a stronger use of government money applied to the development of infrastructure for data collection, for data input and for evaluation… and there are good examples of this.

“An example of where government has put money into a common infrastructure framework is in the homelessness services area where there is a national portal for services.

“So there is a common portal and there is a common framework and people at their screens in not for profits can input the data directly into that common infrastructure, and we want to see that kind of common infrastructure applied more generally.”

While the report focused on Western Australia, Flatau said he predicted the problem extended throughout the country.

“We believe it is and we are going to extend this [research] Australia wide,” he said.

“We have started this in Western Australia but we do want to know Australia wide what the situation is.

“We believe that action is required.”

The Future of Outcomes Measurement in the Community Sector in Western Australia report is the sixth in the Bankwest Social Impact Series.