CFDG publication gives an insight into the gap between the theory and practice of impact reporting
9th February 2011
Charity Finance Directors’ Group is delighted to publish ‘Impact Reporting in the UK Charity Sector’, summarising research carried out by two students from Cass Business School. Kate Harrison and Nicola Robert were commissioned by CFDG to look into the current state of impact reporting amongst charities, and to consider the barriers to successfully demonstrating of impact, which are facing charities. This publication has been written by the researchers in partnership with Paul Breckell, Managing Director of Corporate Resources at the RNID and Chair of the CFDG Impact Reporting Steering Group.
A CFDG member survey, an external reporting review and focus groups provide the basis for the conclusions. Kate Harrison and Nicola Robert commented that, “this project has highlighted the gap between theory and practice in the sector when it comes to impact and outcome reporting. We are grateful for the support from Cass Business School and CFDG in completing the research, and are delighted that CFDG are using our findings to help their members to improve the quality of their performance measurement and reporting”.
Paul Breckell said, “it is essential that charities look carefully at their approach to performance reporting, be it impact reporting or outcome reporting. One of many roles of the contemporary Finance Director is to be engaged with the external communication of performance, including outcomes and impact, as well as financial results.”
Resource constraints, difficulties associated with data collection and the timescale over which impact needs to be measured, all represent barriers to impact reporting. Focus groups indicated that the resourcing issues are escalated by the reluctance of funders to cover the costs of evaluation. Caron Bradshaw, CEO of CFDG, said that “many organisations recognise the importance of monitoring and demonstrating impact, but there are several barriers to putting this into practice. It needs to be recognised that one size does not fit all and CFDG has a key role to play in helping charities find the best way to demonstrate their impact.”
The external reporting review, which looked at the reporting of 75 UK charities, including non CFDG members, also showed that whilst reporting on long term impact is relatively low, a much higher proportion of charities are, in some way, reporting outcomes (68%). The evidence also suggests that many organisations record impact information as part of the internal monitoring process, but do not incorporate this information into their reports. Charities are under extreme pressure, especially in the current climate, and there are obvious sensitivities and concerns associated with reporting failure.
Caron Bradshaw added, “audiences receiving charities’ impact reports need to be aware of the true cost of implementing measuring and reporting techniques, and should be open to the wide variety of ways that a charity can demonstrate social value. Techniques for measuring and reporting impact are still in the early stages and we should work hard as a sector to ensure that impact reporting does not become a compliance stick to beat charities. Charities should be able to find creative ways of demonstrating the value of the activities they undertake and be given the time, resources and support to use information gathered to refine and evolve what they do.”
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Notes to Editors:
1. CFDG is the charity that promotes best practice in charity finance management, supporting finance managers with conferences, training and a wealth of web-based information. CFDG is also active in the policy arena, working on issues that affect charity finances.
2. ‘Impact Reporting in the UK Charity Sector’ is available online here.
3. If you would like to discuss any of these issues further please contact CFDG Policy Officer Katherine Smithson or on 0207 2508347