Charity impact evaluation
Assessing impact involves understanding the difference that charities make and the change they create for the people they help. Charities can find it difficult to demonstrate their impact, but they need to assess their work to show supporters, funders and beneficiaries what they are achieving, and to enable them to make improvements to their work.
For donors, assessing the impact of a donation is important for knowing whether their funding has been well used by the charity and what difference their support has made; as well as for assessing whether they should continue to fund that organisation. Understanding impact can also be key to keeping donors engaged and excited by their giving.
Why donors should measure impact
Donors need to understand whether their donations have been well used and what impact they have achieved. Donors may want to use this information to communicate their impact, share lessons from their work or review their approach or strategy. Some of these reasons will be more appropriate to some types of donor than others. For example, for a corporate donor, communicating impact might be a particular priority, whereas for an individual, it may be more important to understand whether their overall objectives are being met.
Besides this, a donor should be confident that a charity is looking at its results and using them to inform future work. Charities should measure the impact of their work to understand how well they are addressing the needs of the people they are trying to help, improve their activities based on evidence, make the best use of resources, communicate the impact of their work to stakeholders, and share knowledge with other funders and charities about lessons learned.
Different types of evidence
There is a variety of evidence that can be used by charities to demonstrate their impact. Anecdotal evidence and the stories of users will undoubtedly remain powerful influences on giving, but evaluation or performance data is increasingly being asked for by donors. This may include a clear ‘theory of change’ (where the charity maps how its day-to-day activities contribute to its overall mission), before and after data from projects, qualitative evidence, and statistically robust evaluations such as randomised control trials.
It is not uncommon for charities to have no published evidence of impact; however this does not mean a particular type of service or intervention is ineffective. This is a particularly important point for philanthropic giving, which often seeks to support new and innovative work, which by its very nature will not have an established evidence base..
How donors can monitor a grant
There are a variety of ways to assess the impact of your grant, depending on the size of your donation, the size of the charity and what you want to use the information for. The range of options, in ascending order of time and cost commitment for both the charity and the donor include:
- The donor reviews the charity’s publications (website / newsletter etc)
- The charity completes a simple feedback form (has the project exceeded / failed to meet expectations, how many people did the project help?)
- The charity provides monitoring reports it uses for other funders
- The charity provides detailed responses to the donor’s questions
- The donor visits the charity
- The charity conducts detailed monitoring against milestones agreed with the donor. These should be agreed at the start of a grant, and should be realistic and achievable. They usually include goals relating to the charity’s results and should cover both outputs (such as training 100 new volunteers to read to school children) and outcomes (improving the literacy levels of at least 80% of the children on the project). Milestones can also include organisational goals, such as building up the level of reserves or strengthening the management team.
- The donor commissions a third party provider to monitor the grants
Key questions to ask
Important questions to ask any charity you have funded include:
- An overview of the organisation and the context in which it operates—key changes / challenges over the period?
- How was the funding used?
- What did the funding achieve, and how did this compare to expectations?
- What were the main internal and external factors affecting the results?
- Were there any lessons from the funded work? Will these influence future work?
- What are the plans for the next 12 months and beyond for the organisation and the funded service?
- How else could you help the charity (such as by offering your time, expertise, networks or different types of funding)?
Overall impact of a funding programme
Many funders would like to assess the overall impact of their support for charities, rather than just measuring on a charity-by-charity basis. This is not easy. Although you can aggregate data about outputs (such as the number of people supported), it is very difficult to aggregate data about outcomes (the changes achieved in people’s lives). It may be possible for specialist funders who are focused on measurable objectives such as increasing educational attainment or reducing re-offending. But this type of approach needs early on, when planning funding programmes and developing goals and objectives.
Glossary: operating charity, impact