Measuring what matters for charities and donors

For charities, communicating impact is a survival strategy. By crunching the numbers on how many people they’ve helped, how many meals they’ve served, and how many schools they’ve built, charities are justifying their existence and showing donors and beneficiaries alike that they are a safe pair of hands. 

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But measuring this impact does not immediately translate into the successful communication of it. To start with, charities need to make sure they’re looking at the right metrics in the first place. All metrics need to be linked to the organisation’s visions and values.  

Sage Intacct’s e-book, ‘Outcome metrics: measuring what matters in the nonprofit world’ (see below), talks about a pyramid that starts with a charity’s mission and vision at the top, goals and strategy in the middle, before finally building the tactics and activities that make it all come to life. Each tactic should be measured so it can show how it’s helping the charity reach the goal at the summit.  

According to research highlighted in another of Sage Intacct’s e-books, philanthropic impact is the second most researched element of a charity by potential supporters. But above that, even the most searched aspect of a charity’s operations – its overall efficiency – is linked to impact as well.  

Efficiency means that the smallest charity, with limited funds, can have just as big an impact as a large charity. Not necessarily in terms of the number of services delivered, but in the quality of that service, if the time and money is going to the right places.  

It’s all relative and with the right metrics, charities can tell their story in a way that shows their impact off in its fullest glory. With the wealth of data at a charity’s disposal, sorting out the wood for the trees is no easy task and shouldn’t be one asked of supporters. Impact needs to make an impact – show audiences exactly what they need to see and in a visually-dynamic way.  

Sage Intacct suggests that a charity’s website is a good place to give your stakeholders the complete picture of what you’re doing and how you’re doing it. This could mean anything from putting your impact reports online in an easily accessible place to, in the case of organisations like charity: water, displaying your numbers on people served and projects funded clearly on your homepage. 

Sage Intacct’s Outcome metrics e-book also sets out the sums that charities need to measure this impact, from fundraising efficiency (how much do you spend to raise each pound?) to program efficiency (how funds are used for overhead vs making progress towards your goals?). 

These metrics not only assist with getting individual donors to help you, Intacct notes, but can help you secure support from trusts and grant schemes, too. Competing to secure funding from these organisations requires forethought and planning, getting straight to the heart of what funders want to see and addressing any concerns they might have from the beginning. 

Philip Spedding, Senior Manager for Advisory at Charities Aid Foundation, advises that charities look up what exactly matters to the organisation you’re applying for help from. For instance, if it’s a corporation you’re approaching, do they support local charities or do they support a cause? Knowing this will help you work out which metrics you need to talk about to gain their trust and, consequently, funds too.  

Ultimately, well-defined outcome measures can help charities adapt and improve towards the aim of achieving their goal. They can monitor progress and help them communicate this to their funders, donors, and beneficiaries.  

It’s all about showing your working – even if the right outcome has not yet been achieved, you get points for the logic.