Reporting on social impact in the charity sector

17 November 2017

Last week, Matt Stevenson-Dodd, Chief Executive of Street League, challenged charities to be more honest about their social impact in an article in the Guardian. Wouldn’t it be great, if as Matt said, we could have a ‘Top 100’ index of charities measured on their social impact? Our ‘Excellence in Reporting’ in Charities Award this year started down that path by placing a greater focus on charities’ reporting of societal impact and contribution. But to do that, charities not only need to be more honest about their social impact, they also need to be able to meaningfully measure it.

Traditionally, charities have reported annually on ‘inputs’, the resources used in their business activities, and ‘outputs’, the activities that have been carried out. This remains at the heart of how many charities report, as these elements are tangible and easily measured. Increasingly though, as the pressures of reduced funding and greater scrutiny become the new normal, the need to demonstrate their achievements and show the impact that they have on the wider community is challenging charities to do more. Charities at their best are key drivers of societal change. Now is the time to start showing the evidence for this using both words and numbers because at present there is huge variety in the efficacy of these reporting measures and this makes comparison difficult.

Reporting on social impact must be evidence-based and fully supported by aligning publicly reported information with internal metrics and measures, set against the charity’s own targets and previous achievements. Street League has launched their ‘impact dashboard’ which allows them to showcase their data and report publicly on their progress on a monthly basis. This is innovative and with leadership and investment in this area it is something that can be done by many other charities. In the meantime, charities should be looking for ways to measure outcomes and impact within their own contexts. Tried and tested methodologies do exist and the use of these can greatly strengthen both reporting transparency and overall governance, as they provide new tools to assess whether resources are being used to best effect.

Imagine being able to say, for example, ‘for every £1 invested, we can demonstrate £3 of social value’ - and to have concrete evidence to back this up. This can be done through Social Return On Investment (SROI), a method for working out how much value is created by an organisation. A terrific example of this can be seen in our work with St Giles’ Trust, where we helped them to quantify their impact in just such a way. The next step would be for this sort of analysis to be validated independently, in the same way that charities’ accounts are externally audited, to give confidence to stakeholders when they are publicly reported. Indeed, many charities are already gaining assurance over their SROI reports.

We know it may be daunting. But it certainly is possible, and important, for charities to demonstrate the impact they are having in a meaningful and comparable way. The first step for charities is to look at how success is defined and what is being measured to prove that they are successful. If the sector took on Matt’s challenge and our call to shift into this mindset, there is no reason why there couldn’t be a ‘Top 100’ index of charities by social impact in the future.

For further information on the PwC Building Public Trust in Corporate Reporting Awards, visit the website.

Daniel Chan | Manager
Profile | +44 ( 0) 20 7212 7122 

 

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