A to-do list for Nick Hurd, Part 2, Shared measurement

By 18 May 2010

Measurement by charities is not the most exciting subject to most people. But measurement of results is an incredibly important part of running and funding charities. In the second of my series of blog posts aimed at the new British Charities Minister, Nick Hurd, I argue why I think his government department should be driving the development of more shared approaches to measurement among charities.

There are two reasons why more standardised approaches to monitoring and reporting would be a good thing. First, standardised reporting would allow the government, and other funders, to make comparisons between different charities and what they achieve.  With pressure on the public purse comes growing pressure to ensure funds are being spent well—and to direct cuts intelligently. A key part of this will involve picking the right organisations to fund. Government should also have a desire to help organisations improve by learning from each other, which comes from being able to share and compare their outcomes.

The second reason is based on the enormous amount of money charities have to spend complying with funders’ reporting requirements. While it is sensible and necessary for funders to get information from charities they support, reporting requirements should be proportionate and, ideally, coordinated. NPC ran a research project which produced the first ever estimate of the cost of reporting requirements. For statutory funders, this averaged 8% of the cost of contracts. The third sector receives £7.8bn from government contracts each year, implying that £600m is spent by charities reporting back to government. On a conservative estimate, standardised reporting frameworks could reduce this burden by 25%, saving the taxpayer £150m a year. That is 50% more than the entire budget of the National Audit Office.

Some are sceptical about the benefits of shared measurement. For example, Givewell, a US-based blog which assesses nonprofits, just recently poured cold water on the idea. Their criticisms are a little mis-placed. The most promising shared measurement efforts bring together charities to define common outcomes at the start. Trying, as Givewell does, to impose such comparisons after the fact is more difficult. Even so, thinking about common elements of outcomes—even defining ‘chains of outcomes’ akin to a supply chain—can improve decisions and allow people to understand the importance of different contexts. Naive comparisons of outcomes is, of course, to be discouraged. One must also acknowledge the importance of understanding and analysing the organisations delivering the outcomes, as highlighted in NPC’s publication The little blue book.

And, bad measurement can be damaging. There is more talk about good measurement than there is practice of it, especially in the field of social return on investment (SROI) where the challenges of measurement are often skated over in an attempt to get to a final number. Moreover, good measurement takes time and costs money. But the benefits are tangible.

In the US, shared measurement is a growing practice, and the consultancy Foundation Strategy Group recently produced some reports on the subject. In the UK, the Outcomes Star developed for charities working on homelessness has been successful in improving practices and understanding in the field. NPC is currently working on a shared measurement framework for charities supporting the maintenance of family ties for prisoners (which has links with re-offending). In addition, NPC’s work on children’s well-being can be seen as developing a shared measurement framework for a range of very different charities working with adolescent children.

In short, the field of shared measurement has real promise. Nick Hurd should grasp the nettle and push it forward by promoting a few studies in spending departments with support from the newly re-branded Office of Civil Society. It would both save money as well as improve information, standards and practices among charities. It would also deliver on his commitment to ensure charities are “not overwhelmed by interference and bureaucracy.”

(It is worth noting that Evaluation Support Scotland is doing work on standardised reporting for foundations and some statutory bodies. This follows NPC’s work in Scotland on Turning the tables.)