Three in five people think charities spend too much on salaries and administration costs according to a survey conducted by Ipsos Mori this summer.
Charity expenditure is perennially under the spotlight, with headlines such as ‘City pay culture has spread to charities’ and ‘Millions in donations blown on administration costs’ adding to a high level of public concern. Yet, as every charity knows, these figures can be grossly misrepresentative. Suspicion that money isn’t being spent properly partly stems from the assumption that “admin costs” are separate from “core costs” and should be minimised. But as often as we challenge the hypothesis that low administration costs lead to a higher performance, the exercise reveals something much more telling: that answers to some of the questions posed by funders simply don’t exist.
If we want to encourage confidence about a charity’s effectiveness, we need to explain to funders where their money actually goes. The decision about whether or not to support a charity should be based, above all, on its impact. Therefore, alongside the technical process of measuring impact, it is vital that every organisation communicates how they are achieving the change that they seek—or risk blunting the effect of those results. And not only to stakeholders but to staff and trustees as well, so that a focus on results becomes a valuable part of thinking about the charity’s mission and in shaping how it is perceived.
A charity needs a compelling narrative and clear objectives, but it also needs to explain its activities, how it achieves results, and importantly, convey the lessons it has learned. An impact report should capture all these processes in a way that is transparent, accessible and accountable.
By raising the profile of impact measurement and reporting the results that it shows, charities can help to see off questions about running costs and towards what really matters: the difference they make in people’s lives.
- NPC is running a workshop to explore the basic principles of a good impact report and the actionable steps charities need to take to put them into practice. If you’re ready to learn about this final part of the measurement equation, come and join us on 15th November and receive advice from experts as well as the opportunity to meet other organisations going through the same process of learning.