NFPs struggling to measure their impact

Charities need greater funding support to measure outcomes with many not for profits lacking the resources to do so effectively, new research has found.

The report from the University of Western Australia’s Centre for Social Impact said there was a gulf between the expectations of NFPs to measure their outcomes and the funding available to do so.

Researchers said funding contracts – particularly government ones – should include dedicated funding for impact measurement.

UWA Centre for Social Impact lead researcher Professor Paul Flatau said the report showed the proportion of organisations measuring their impact fell from 75 per cent to 70 per cent in the past year.

But charities that did measure their outcomes put in greater effort than they had in previous years.

“A key finding is charities face significant constraints to resource outcomes measurement activities,” Flatau said.

“Around 60 per cent spend less than 3 per cent on outcomes measurement which is far lower than recommended levels. A primary cause lies in the lack of funding to measure outcomes effectively with funds mainly sourced internally.”  

“We all know that what gets measured gets done.” @Bankwest Bankwest CEO Rowan Munchenberg on the importance of measuring outcomes of organisations in the community sector. pic.twitter.com/NvG3ZJnlbp

— Social Impact UWA (@UWASocialImpact) April 11, 2019

More than 350 small, medium-sized and large charities across Australia took part in the research, which found organisations with a turnover greater than $1 million were more likely than smaller organisations to measure their outcomes.

Flatau told Pro Bono News funders frequently expected reporting of outcomes but were much less likely to provide funding to do so.

He said when researchers asked charities about why they were measuring outcomes, the reasons were broader than simply satisfying funders.

“The prime driver is actually internal improvement and improving outcomes for clients,” he said.

“We found it really interesting that organisations largely expressed positive sentiments about impact measurement and were happy to do it.”

But he noted awareness of state government outcomes-related initiatives was extremely low in the sector, with most charities not having heard of their respective state government’s policy around outcomes measurement.

Case studies, interviews, and customer satisfaction surveys were the most commonly utilised tools for outcomes measurement, with more than 40 per cent of responding charities using these tools.

Flatau said it wasn’t just governments that needed to spend more supporting charities to measure and report outcomes back effectively.

“We’re finding philanthropy needs to play a good part as well and maybe even general purpose grants from government around developing measurement resources,” he said.

“It also really pays for an organisation to develop their own outcomes measurement framework. It’s a big task but charities developing their own outcome tools and outcome measurement framework will be really setting the agenda.”

He said organisations such as the Centre for Social Impact also had work to do developing tools and resources to help charities in this area.

Debra Zanella, CEO of RUAH Community Services and president of WACOSS, said there were still improvements to be made in terms of outcomes measurement practice.

“Not only do organisations need to invest in developing internal capacity for measurement, funders need to come to the table and recognise the cost and effort associated with outcomes measurement and fund accordingly,” Zanella said.

As well as calling for greater support from funders, the report said charities should better articulate the outcomes they’re seeking to achieve and measure, and say how much this will cost in funding applications.

Researchers added that greater sharing and collaboration between organisations around their outcomes measurement practice would help charities to learn from each other’s successes and failures.