Charity Impact Measurement Still Needs Work - Study

A new study has revealed 25% of UK charities don't measure their work. Photo: capreform.eu

Only 5% of UK charities say that wanting to improve their services is a primary motivation for increasing their impact measurement efforts and 25% of charities still don’t measure their work at all, according to new research.

And Australian researchers say while there is an upward trend in the interest in measuring impact here, much more work needs to be done.

The UK charity think tank and consultancy, New Philanthropy Capital has released what it describes as the first representative study of impact measurement amongst UK charities called MAKING AN IMPACT Impact measurement among charities and social enterprises.

It surveyed 1,000 charities with incomes over £10,000 to understand what has changed in charities’ impact measurement practices, the drivers behind measuring impact, and the benefits and challenges that it brings.

Some 75% of charities say they measure the impact of their work and nearly three quarters (74%) of these have invested more in measuring results over the last five years.

The report finds that over half of respondents (52%) measuring impact say they have increased their measurement efforts in order to meet funder requirements. However, only one in twenty (5%) say that service improvement is their main motivation.

“Yet one in four (25%) report improved services as the main perceived benefit of impact measurement,” the Chief Executive of NPC, Dan Corry said.

“The discrepancies between what motivates charities to measure impact and what they get from impact measurement reflects the widespread anecdotal evidence NPC has collected. Whilst charities might be initially reluctant to engage in impact measurement, they go on to find that they reap valuable and sometimes unexpected benefits from it.

"NPC’s impact survey shows that many charities have to be ‘forced’ to assess their impact, but having done so find it helps them to improve their services. There is still a long way to go in getting charities to embrace impact measurement wholeheartedly, rather than seeing it as a burden."

UK Charities report that changing funding requirements have been the primary driver of increased investment in impact measurement over the last five years. There are other drivers—in particular, charities’ boards and senior management prioritising impact—but funders play a critical role in shaping behaviour.

The Charities say that a lack of funding for impact measurement is the main barrier to making progress. They are also concerned that funders generally have different reporting requirements, which are not aligned with the charities’ own needs.

The research found that different types of funders seem to drive different types of behaviour and practice among charities. UK Government funders are seen to have stringent requirements around measuring impact, but also to provide funding for evaluation. Trusts and foundations are viewed as having less strict requirements, but being supportive and encouraging in their approach to funding evaluation.

"We hope that this report and its findings will help both funders and charities to work together to turn impact measurement into an integral part of third sector activity," Corry said. 

The Making an Impact research also identifies key challenges with impact measurement, notably:

• A quarter of charities (25%) 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 with an income below £100,000 do not measure at all.
• Funding is seen to be the greatest barrier. Nearly two thirds of funders (64%) are not perceived to build evaluation support into their funding.

The research was funded by The Big Lottery Fund, The Cabinet Office, Barrow Cadbury Trust, The Northern Rock Foundation, Paul Hamlyn Foundation and The City Bridge Trust.

In Australia, the most recent research published on Impact Measurement was by Assoc Professor Gianni Zappala and Mark Lyons in a background paper for the Centre for Social Impact in 2009 called Recent approaches to measuring social impact in the Third sector: an overview.

At the time the study found overall that although a minority of organisations are collecting outcome and results data, very few have internal evaluation staff, even fewer use external evaluators, most are not using Logic models, and very few receive funding to undertake evaluations.

At the time, the researchers said that while similar large scale studies of the evaluation practices of Not for Profit organizations do not exist for Australia, they know that many of the Not for Profit organisations in the social assistance (previously community services) industry continue to use many older evaluation techniques and indeed many are enjoying a new lease of life.

The researchers said this is particularly the case in the large social assistance Not for Profits (i.e. those with an annual turnover over $20 million), and especially those that have developed strong partnerships with large corporations.

Today, Assoc Professor Zappala says Australia is seeing a slow and steady increase in organisations interested in Social Return on Investment (SROI) however no where near the levels seen in the UK.

Assoc Prof Zappala says there is now legislation in the UK, introduced this year, that creates more incentive for Not for Profits to measure their impact.

He says in the training course he delivers for the Centre for Social Impact “Demonstrating Social Impact” is attracting high level participants who are facilitating SROI skills into their organisations.

As well he says a national Social Impact Network will be launched in December which is aimed at broadening interest in SROI.

Download the UK report.