Impact reporting for charities

In “Regulating in the Public interest: The relationship between charity, charities and the general public” it was found the public have 4 key expectations:

1. That a high proportion of charities’ money is used for charitable activity
2. That charities are making the impact they promise to make
3. That the way they go about making that impact is consistent with the spirit of the ‘charity’
4. That all charities show a collective responsibility to each other in adhering to the above

Society needs charity to thrive. In turn charities need public support and the trust and confidence which underpins it. Meeting public expectations is vital and open, transparent reporting should help to meet this.

Traditional reporting focuses on inputs and outputs: what resources have been raised and how have these been spent; and what activities have been done to meet the charitable purposes.

Impact reporting requires you to look beyond this and measure outcomes and impact

• What has changed as a result of the charity’s activities?
• What impact has / will this change have?
• What is the value of that impact?

From a reporting perspective the outcome element should be fairly easy to report on as the changes the charity makes will be the things it wants to talk about when telling its story. That information should be available and able to be scrutinised or validated.  What becomes more complex is defining the impact and then the value of the impact, and this information will be based on assumptions or case studies so may be harder to validate. 

If you are looking to prepare impact reports consider

1. Where?
   Where will the impact reporting happen, will it be on your website, in your financial reports, or in a separate document? If you choose to share this information on your website or in a separate document these do not fall within the audit requirements but you will need to ensure that the information is kept up to date. However, if you choose to include reporting within your financial statements your auditor will need to review what is being reported and you will need to share calculations of impact and assumptions that have been made in arriving at these results.
   
   
2. What?
   What will you report, when putting yourself in the shoes of a donor what information do you think they would want to know? Would reporting on strategic goals and the measures of success for these provide a wider understanding of the impact the charity is making? Any reporting should be a balanced view so how will you report things that did not go well and lessons learned from those activities?
   
   
3. How?
   How will you present information? Consider using charts/info-graphics/tables/powerpoints/video etc. How will you measure the value of impact, what metrics will be most important, how will you get these?

Covid-19 and impact reporting

The public will be keen to find out more how Covid-19 has affected charities and sharing this information in an open and transparent way could help with building trust and assist with the post pandemic recovery.

Areas to consider when preparing your report are

• Impact on activities, service delivery, and beneficiaries. What changed in response to pandemic restrictions, what has been learned, how will activities look as we emerge from the pandemic?
• Impact on the charity’s finances and reserves. How has the pandemic affected income and expenditure, what actions have been taken and how will this affect future income and expenditure?
• Impact on reserves and going concern. Have reserves been eroded, has this raised uncertainty that the charity will remain a going concern, what is the plan to resolve this?
• Impact on strategy and goals. Is the strategy and goals the charity had in December 2019 still viable as we emerge from the pandemic? What lessons have been learned and adaptations made that now need to be factored in?
• Impact on risk and uncertainty. What has been the impact across the charity’s key risk areas? What changes have been implemented and what affect should this have in the future?

No one has escaped the effects of Covid-19 on their activities, for some this was a positive experience, raising funds to help those affected and getting those monies to the most in need; for others their methods of delivery of services have had to change; and for others it resulted in an almost cessation of activity.  

Each story is different but the public will want to hear it to understand what steps the board took during the pandemic and what their plans are moving forwards.