How to talk about impact with funders

Trust is one of the charity sector’s most valuable assets. Charities are among the most trusted organisations in the UK, with only doctors ranking higher, according to research by the Charity Commission.  

That trust rests on one key principle: impact. The public, donors, and funders alike want to know their money is making a tangible difference. The Charity Commission found that two factors matter most when it comes to trust: donations reaching the intended cause and the charity achieving its purpose. 

While the research refers to individual donors, the same levels of transparency are required by grant funders. As financial software providers Sage point out, “Heightened expectations and heightened scrutiny come from several sources—including ever more-engaged funders looking for financial management techniques and principles employed by for-profit businesses.” 

Whether charities are reporting back after receiving a grant, or applying to a new fund, grant funders require intricate detail on how their money is spent and how much impact has been or will be delivered as a result.  Grant funders must trust that their money has been managed wisely, in alignment with the charity’s mission. 

The best way to engender that trust between charity and grant funders is data. In its e-book Outcome Metrics: Measuring What Matters in the Nonprofit World, Sage notes that outcome metrics “are powerful, essential tools for demonstrating accountability and transparency”.  

“They can measure financial or non-financial criteria that reflect an organisation’s, program’s, or initiative’s efficacy,” Sage adds. “They’re derived by carefully defining outcome indicators, data-collection methods, analytical techniques, and presentation vehicles that collectively show a rich picture of organisational performance.” 

In this article, we explore how charities can use outcome metrics to build stronger relationships with grant funders and how they can translate impact into further support.  

Download the full e-book 

How to talk about charitable impact 

1 - Define success 

Funders support charities in different ways - sometimes backing specific projects, sometimes investing in the organisation as a whole. To make reporting meaningful, charities need to identify which outcomes matter most to each funder and clarify what success means in that context. 

Defining success and using data to demonstrate progress towards that aim shows funders the value of your charity work and builds stronger relationships that may continue to deliver in the future. 

Sage explains: “In a competitive environment, the ability to define, measure, monitor, and report the metrics that define success can encourage new and additional funding from donors, foundations, and other benefactors. For instance, demonstrating achievement of key milestones can unlock subsequent rounds of multi-year grants.” 

2 - Prioritise transparency 

Data isn’t just about numbers; it’s about accountability. Sage notes in its e-book that funders are “increasingly tying their support to stringent accountability”, wanting to see where the money is being spent and the results achieved, whether that means growth of the organisation, more services delivered, or more nonprofit partnerships. 

Being open with data builds credibility. Even if projects don’t always go as planned, outcome metrics can show the direction of travel and highlight valuable lessons learned. This honesty strengthens funder relationships and signals a genuine commitment to accountability.  

Data is essentially the empirical, impartial evidence that backs up the work charities are doing – setting out this data clearly to funders shows them that your charity is open, transparent, and a reliable collaborator.  

3 - Always link back to your mission 

It’s easy to get lost in the detail of reports, but impact only resonates when tied back to the bigger picture: your mission. Funders, too, can become invested in one small area of a project, and without context, may lose sight of how that project contributes to a charity’s wider work. But, as Sage points out, “Outcome metrics deliver value only if they are tightly linked to your core values and mission.” 

 To make impact clear to funders, charities must continually bring every activity back to how it affects your charity and its purpose. How many more beneficiaries can be helped, for example, as a result of a digital transformation project? How many services can be continued because of investment in cyber security? How many more services can be developed because of organisational growth? 

Sage recommends thinking in terms of a triangle: 

• At the top, your overarching mission
• In the middle, your goals and strategies
• At the base, the tactics and activities that make them happen

For example, perhaps you want to launch a service that addresses a core issue faced by your beneficiaries – this would belong in goals and strategies, as it affects your mission but isn’t your entire purpose as a charity. Tactics and activities may include creating new fundraising appeals or increasing social media reach to raise awareness of the cause. This determines what you measure and should always be aligned with the charity’s overall mission to create a direct line in a funders’ understanding between small activities and their wider impact. 

Turning metrics into momentum 

When used well, outcome metrics do more than prove accountability—they inspire confidence. They reassure funders that their money is making a difference today, while also setting the stage for future collaboration and support. 

For more guidance on building outcome metrics into your reporting, explore Sage Intacct’s full e-book Outcome Metrics: Measuring What Matters in the Nonprofit World. 

Download the full e-book