How do your donors know that the money they give you is making a difference? The answer is that they don’t, unless you tell them. Good impact reporting tells donors what their money achieves, but also appeals to outcomes-focused funders and helps organisations to develop and refine their own strategy to increase their effectiveness.
NPC has been running a series of seminars on impact reporting over the last month. In the first, An introduction to impact reporting, we talked about what a good impact report looks like, and suggested working through the following five questions to help make sure your reporting has a clear narrative for the reader:
1. What’s the problem we’re trying to tackle?
Some problems are easy to describe—preventable blindness, for example—and others require more explanation. This is your chance to tell potential donors why what you do is important—tell them about the context in which you work, and the needs of your beneficiaries. You need to make sure your donors understand the problem you’re addressing and the impact it has on people’s lives, so they appreciate why you need their help.
2. What do we do to address it?
Explain your activities clearly—what you do day-to-day to try to overcome the problem you explained in question one. This is fairly straightforward for smaller, single-issue charities, but can be tricky for large organisations which carry out multiple activities in a range of different areas. Barnardo’s, for example, has over 400 projects, so one of the challenges it faces when talking about its impact is to explain how they all fit together.
3. What does that achieve?
Many charities find this question particularly tricky: it requires you to look at the outcomes you are achieving, and try to link them back to your activities, attributing changes to your work. How many cases of preventable blindness were prevented because of your charity? One way to think through the difference you make is to imagine what the world would look like if your charity wasn’t here.
4. How do we know what we’re achieving?
You need to provide clear evidence to support claims about your outcomes. By evidence, we don’t just mean complex measurement tools and randomised control trials—good impact reporting includes a combination of case studies, anecdotal feedback, survey results, web stats, and so on. WRVS’s impact reporting features real-life stories from beneficiaries, high level facts and figures, and regular social impact reports, amongst other things, to give a comprehensive picture of their achievements. RNID (now Action On Hearing Loss) communicate their impact very effectively through a series of videos on their website. Think about what is the right level of evidence for you—collecting a lot of unnecessary evidence is a waste of your time. Just because something is easy to measure doesn’t mean it will tell you anything useful about your impact.
5. How are we learning and improving?
Finally, talk about the challenges you’ve faced, the problems you’ve overcome and what you’ve learned from them as an organisation. Many charities are currently missing an opportunity in their reporting to explain how they have confronted challenges and changed their methods to become more effective as a result. Don’t be afraid to talk about your failures—as long as you can show what you’ve learnt from them.
You can read more about these questions, and what good impact reporting looks like, in NPC’s paper Talking about results, or visit our website to learn more.
The opening line is the real clue here…
“How do your donors know that the money they give you is making a difference? The answer is that they don’t, unless you tell them.”
In my experience, a donor is primarily interested in hearing about a specific project they ‘have’ funded rather than being presented with a report that demonstrates the size of a problem, organisational reach or wider impact of a charity.
The advice here seem to be encouraging charities to say ‘look at what we’ve done’, whereas the secret to successful impact reporting (if your goal is engagement) is to take the approach that many major donors demand and say, ‘look what you’ve done’.
And in this respect, personal is of major importance. A generic report or website isn’t a particularly inviting place for a door to find out about how their gift has made a difference.
The key advice I’d offer any charity is to ensure impact reporting is personal, relevant and appropriate.
Thanks for the comment Mark. I think you’re right, to really engage with donors you do need something more personal than a generic report. If you wanted to tailor your impact reporting to particular donors to make it more personal, you could use these questions to think through a particular project.
The key is the focus on impact—showing how your activities are making a difference, in order to show donors what their money has achieved, rather than just how it has been spent. NPC did some research last year which found that most charities are very good at talking about their mission and activities (what they want to do, and how they spend money), but far fewer can link these activities to their outcomes (what they’ve achieved in terms of real change). Thinking through these questions can help charities to tell donors clearly what their money has actually achieved, rather than just what it has paid for, and provide evidence of that.