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Lack of Funding to Measure Outcomes Leaves WA Charities in ‘Catch 22’ Situation

18 July 2017 at 8:39 am
Wendy Williams
More than 30 per cent of charities in Western Australia are failing to measure their outcomes, according to a new report which reveals community sector organisations are being “hamstrung” due to a lack of funds.

Wendy Williams | 18 July 2017 at 8:39 am


Lack of Funding to Measure Outcomes Leaves WA Charities in ‘Catch 22’ Situation
18 July 2017 at 8:39 am

More than 30 per cent of charities in Western Australia are failing to measure their outcomes, according to a new report which reveals community sector organisations are being “hamstrung” due to a lack of funds.

Outcomes Measurement in the Community Sector: Are We Heading in The Right Direction? is the eighth report in the WA Social Impact Series and explores the extent to which charities are able to assess their impact in the communities in which they work.

The study, released by the Centre for Social Impact at the University of Western Australia on Monday, found only 68 per cent of the state’s charities were measuring their outcomes, down from 70 per cent last year, with increased funding constraints having an adverse impact on small and medium organisations in particular.

CSI UWA director and study lead Professor Paul Flatau said charities lacked the necessary resources.

“Australia’s charities exist to make a difference, yet our findings indicate that they do not have the resources or infrastructure to fully measure and demonstrate the difference they are making,” Flatau said.

In particular, the study, funded by the Bankwest Foundation, found small and medium sized organisations, which make up three-quarters of the state’s registered charities, were most effected with less than half able to measure their outcomes, compared to 87 per cent of large organisations.

Moreover the decrease in overall outcomes measurement between 2016 and 2017 was attributed, in a large part, to a decline in outcomes measurement among medium-sized organisations, with the numbers falling from 85 per cent in 2016 to 70 per cent in 2017.

Bankwest head of community engagement Craig Spencer said the report identified both an ongoing issue for the sector and the root cause of the issue.

“As is so often the case with the charity sector resources and funding appears to be the main barrier,” Spencer said.

“Only a third of the charities polled say they have access to adequate resources for outcomes measurement and very few organisations have specialised data collection staff [6 per cent] and/or research and evaluation staff [5 per cent].”

Despite the barriers, the research showed there was an understanding of the need to measure outcomes.

A total of 38 per cent of small organisations, two thirds of medium sized organisations and 63 per cent of large organisations reported an increase in their effort in the last 12 months toward outcomes measurement.

Moreover for those community sector organisations that did measure outcomes, outcomes measurement practice was seen to be improving with greater effort being put towards outcomes measurement, greater use of tools, and less perceived barriers.

But Spencer said charities were faced with a “catch 22 situation”.

“Funders are increasingly requiring these charities to report back on their outcomes. But the problem is that they’re not providing funding at a commensurate level, with a huge number of organisations having to fund outcomes measurement from general internal funds,” Spencer said.

Flatau said until direct funding for outcomes measurement was improved, the community sector would be “hamstrung on increasing its social impact”.

“Overwhelmingly, we hear that there is a recognised and urgent need to effectively measure outcomes, but until funds are secured to do so, there is little chance it will be done effectively and consistently,” Flatau said.

“Without funding, organisations are resorting to diverting funds away from service delivery, which, as you would expect, goes against the core principal of many of these front-line workers.”

The report also found that organisations that were measuring outcomes in 2017 were spending a greater proportion of their budget on outcomes measurement compared to 2016, yet two thirds of all organisations spent less than 3 per cent of their budget on outcomes measurement.

Spencer said the report pointed towards a breaking point in the community sector.

“If the charitable groups can’t measure their outcomes they’re going to lose access to a critical source of funding and will simply cease to exist,” Spencer said.

“This presents a real risk to the communities in which these groups operate.”

In response to the report’s findings, CSI UWA and the Bankwest Foundation have produced a 10 point action plan calling for:

  • full funding for outcomes measurement in contracts;
  • capacity and infrastructure for data collection and reporting;
  • sharing best practice;
  • guidance on using tools and methods;
  • greater recognition of client/consumer outcomes in funding contracts;
  • standard language and concepts;
  • eliminating differences in reporting between funders;
  • collaborative projects with shared outcomes;
  • open data from government; and
  • an increase in external reporting requirements of outcomes.

Spencer said: “We hope these initiatives and processes will assist the community sector organisations which do such vital work, to continue to do so, helping the communities they serve fulfil their true potential.”

Wendy Williams  |  Editor  |  @WendyAnWilliams

Wendy Williams is a journalist specialising in the not-for-profit sector and broader social economy. She has been the editor of Pro Bono News since 2018.

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