Where are we now on the impact journey?

This is a transcript of Dan Corry’s speech at NPC Ignites 2024, with additional links and headings.

Good morning. And thank you for being here to listen to my last speech as NPC CEO.

I think you should always be suspicious of the person leaving their job who claims they have achieved loads – so I don’t want to exaggerate any of that! In any case, anything achieved has been a result of having terrific and passionate staff at NPC over many years.

I came to the sector pretty cold.

But not cold to impact or evaluation; or data; or value for money; or cost benefit analysis. Much of my career had been about all that in different ways. I once even edited and wrote chapters for a book on all this focused on public expenditure.

I also brought to the job experience of policy making, politics, the civil service, local government, think tanks, comms. An interesting and perhaps unusual mix.

What did I find?

A strange world.

So I found passion, mission and heart a plenty. Very refreshing and energizing compared to some other sectors I have worked in. And stories galore of good things done that – unless you are a very unfeeling person – bring a lump to your throat and tears to your eyes.

I have also seen many amazing charities – some of them here today at our Ignites conference. Little charities doing great, much needed work, and trying to learn and improve; larger ones taking advantage of their capacity, scale and reach in a way that really helps those in need; philanthropists who really care and want to make a real difference to the lives of those less fortunate than themselves; volunteers who do what they do because it is the right thing to do. My own experiences on the board of St Mungo’s and now as Chair of the Carers Trust have made me deeply impressed with the level of dedication of charity staff and also by the unpaid volunteers who make up our charity boards.

I strongly believe that just by existing as a sector – where neither profit maximisation nor the tax funded state are king – we are important for building a successful pluralist society and economy. The sector allows voluntary activity and active citizenship to flourish. (See the ‘Shared Society’ needs a strong civil society for a fuller discussion of this role.) So I value all this enormously.

But I also found little focus on using resources effectively. That’s not what people get into the sector for or – largely – are judged upon. And in fact, there are many things that make that focus very hard.

The ‘anti-social sector’

Tris Lumley, one of the great minds of NPC, talks sometimes about the way the social sector often feels like ‘the anti-social sector’ in practice. Why? Because charities and non-profits behave as though our funders and trustees are our primary stakeholders, not those we say we’re here to serve.

This situation is encapsulated in what I have called a ‘laissez faire’ approach within and towards the sector. That says that the sector is whatever people voluntarily choose to do and we should leave it like that and accept whatever that produces.

But that is not good enough. Impact, outcomes, making the most difference you can matters.

Why do I care about that? Not because I’m a former Treasury staffer and an economist. But because I am passionate about social justice, about creating a better society, about tackling our environmental crisis, about doing our best for those most in need. That’s why I care.

If we could get 20 or even 10% more out of the sector – by doing more of what we already know works, then the UK, the world, would be a much better place. It could be even higher if charities innovate more.

That’s why I have argued that it is borderline immoral not to at least think hard about whether you could do more with your resources than you do now.

Yes, I think that also refers to where you focus your efforts by topic and geography. Some charities have plentiful resources – the public love animals and children’s health issues. Many ‘less popular’ causes have much less than they need.

And that goes for where you fund or operate too – even within the UK where there are great spatial differences in the amount of formal charitable activity, with less in more deprived areas, as our work has shown

As I once said in a speech on morality and the sector: “Is it ok to meander through and over the homeless sleeping around the Strand and then give your philanthropy to the Royal Opera House”?

So many things militate against a focus on impact. Everyone has to fight against the incentive structures they face and it’s not easy.

Governance is crazy; funders are variable and powerful; funding mechanisms guarantee competition not collaboration; contracts promote short termism; there is a lack of common metrics to aid comparison and learning, and a real absence of benchmarking data. And yes, there are too many people who do not want to engage with – or even say out loud – concepts like effectiveness, efficiency and value for money.

So a system that almost works against impact – an unwelcome concept resisted by many.

Helping the sector become more impact focused

I tried to make analytical sense of all this in an (early) speech in my time at NPC all about how we drive innovation and productivity (aka impact) or even if we can – in the non-profit world. Unlike some of my other writing, I think it passes the test of time!

The incentives are all wrong, rewards are for the wrong thing. To give an example, as I said at Ignites 2018, ‘I’ve yet to see a CEO sacked for failing to achieve enough social impact.’ I still haven’t!

And even when people are in a sector where cheap, easy to use tools to assess impact exist – like the Justice Data lab that we nurtured and support and is run by the MoJ – such tools are rarely used and are rarely required to be used by funders.

In truth we still find the measurement of productivity for a charity or the sector very difficult despite more recent heroic attempts by people like Josh Martin and Jon Franklin.

Problems of definition; data availability; lack of a paid for output (in most cases); treatment of quality, of volunteers and outcomes; non-pecuniary benefits of working in the sector; and so on are yet to be overcome. I hope that the fledgling moves towards building a civil society satellite account by the ONS will continue with this new government and bear fruit in helping us out more. (For more on this, see ‘Measuring the Voluntary Sector’.)

In my time leading the organisation, our work at NPC has been all about trying to help the sector become more impact focused. Never of course giving up on passion and mission but aligning it with a focus on achieving as much as is possible with the resources available.

It’s an ambitious mission and rightly so. And we have tried to do it by a combination of consultancy – working every day with many charities and funders – and think tank work, where we push ideas into the debates, show good and best practice and try to implicitly shame the laggards. Ideally both sides reinforce each other and make us more impactful. But it is not easy and it’s a pretty tough business model.

The next steps on the impact journey

But I do believe that we have made a lot of progress. Not just due to us of course but the movement we have been part of and have often led. Impact is up the agenda. Few would now say it is irrelevant or wrong.

A lot of this has been about the impact of programmes or activities using evaluation techniques and Theories of Change to guide them. And of course, how to do due diligence well. We have tried to do this in useful not over complex ways.

We have for instance preached proportionality, thinking about what is right for a smaller charity to collect and do as in our Five Types of Data approach. I have always resisted supposed hierarchies of what is good evidence – we would rather have a good ‘before and after’ approach than a poor-quality and expensive attempt at an RCT. Our Inspiring Impact programme to help all types of charities start on the impact road was well used.

Our approach to evaluation and assessing impact has itself changed a lot over the years as I outlined in a speech to Ignites a couple of years ago. We use more qual, more user experience. We try to go for Balanced Evaluation, melding traditional techniques with more bottom up and equitable approaches. We preach more risk taking. That means ensuring that due diligence does not always steer one towards going for the safe charity to support or the safe intervention. We have pushed agile strategy since the world is always changing.

We have recognised that charities will never be able to collect enough data themselves. So we have pressed for government to utilise and share its data. We’ve had some success here with the very exciting Data Labs that help assess impact that now exist in MoJ and DWP.

We have argued for charities and funders to share data, and ideally some metrics, and evaluations and appraisals and our Open for All programme is looking at that now. We have produced our Local Needs data dashboard to help charities access data and to input their own. And of course, there are other great initiatives like 360 Giving and we hope that the Charity Commission will be opening up and speeding up the release of their data soon. Hopefully the advent of AI and other digital tools will help in data collection and analysis for charities.

There are dangers with all this. The plague of iffy SROIs and what academics have called SROI inflation is one. The danger that important new concepts like wellbeing are too quickly turned into attempts to argue the monetary equivalent benefit of various things is another. In my view these stretch the data too far.

There are also lots of measurement requirements that funders make, that take lots of time, don’t effectively measure impact and are often not used for future decision making. A bad use of everyone’s time.

And of course, charities and non-profits also need data that is not specifically about impact – the difference you make – but the ingredients that go up to make it like cost by site and satisfaction data. (See Gugerty and Karlan.)

But these are all steps forward.

Of course there are doubts about the ability, skills, capacity of the sector to do any of this.

We can and must have better data, analysis, better techniques, and I think we need some infrastructure to help with all this which is why I have put forward the idea of a civil society improvement agency.

But more profoundly, how deep has this gone into the psyche of the sector? Is the impact agenda still off to the side, a ‘nice to have’, a way to tickle the ego of funders? Has it really broken into the boardroom and is it driving strategy? The thing now is to make impact more central to all our work. Impact needs to be seen as the key element for every charity and funder’s strategy not just an add-on. Measuring is not enough if it does not then fundamentally guide decisions.

That is surely the next step we have to take on this journey to impact.

The future of impact

But there is and must be even more.

Lots of the issues around impact turn on other things beyond just a single charity or funder measuring and then using its resources or programmes and interventions well.

Here are some.

Who charities and funders choose who to work with – whether they are those most in need and most able to be helped by their programmes. Linked to this is the need to make Diversity, Equity and Inclusion central to our impact. We rightly need to sort ourselves out internally – we’ve worked on that at NPC – but we all need be outward looking too. That means focusing on how our actions play out across different aspects of diversity – including class and ethnicity – how we are doing evaluation, who we are giving platforms to.

Impact is also likely to be higher if there is more interaction and work with those with lived and community experience.

One way to create more impact is to think about scalability – one way or another. But that is hard in our sector – getting bigger means chasing more funding. If you want to do something small and innovative that, if it works, you can try to scale up, you need to think how you might do that.

And that links to the point that we have to be realistic that charities and the charity sector are just not big enough to change the world on their own – they need to work with the big streams of influence, regulation, laws and money and with representative democracy. So that means with government at all spatial levels.

For major impact we need system and systemic change. That implies collaboration and linking up; and new approaches to leadership in our sector, a point raised at last year’s Ignites conference by Mike Adamson, then CEO of the British Red Cross.  But in addition, creating and stimulating system change requires campaigning, influencing and nudging policy at all spatial levels as well as the very hard job of trying to change public attitudes.

And that is why we strongly support charities campaigning and why I have built up the policy and comms team at NPC, and why we have produced guides, research and consultancy offerings in these areas.

The charity world rightly takes pride and strength from its independence from government, but charities and funders need to work with the public sector at all levels – something we outlined in our pre-election ‘manifesto’ ‘Partners for Change’.

It feels like at least some parts of government haven’t seen the sector as a useful and cost-effective solution to social challenges, but with the new government there are signs of that changing.

So, a lot of thought and work is going on although we always need to be alert to any backlash to the impact and outcomes agenda including via some aspects of the trust-based philanthropy movement.

And of course, social impact is not just about the social sector. Which is why you have seen us at NPC moving more fully into work on Impact investing and looking at Corporate social impact in recent years.

Conclusion

So, to answer the question I posed at the beginning, we have got a long way, but we have further to go. Impact is now much more part of the conversation than when I started at NPC back in the early Coalition years. But there is a feel that it is sort of plateauing.

There is not enough data, not enough good learning and evaluation, and even where there is, it often does not shape decision making.

The sector is still too precious, too disjointed, too defensive. It often pushes back against things that could help – like submitting more data to the Charity Commission or considering mergers more often – not just when you are going bust. It has an unhealthy delight in the big versus small charity narrative, each criticising the other, weakening the combined voice of the sector, when in truth we need both ends of the spectrum – and a lot in the middle.

And it is constantly blaming commissioners – a lot deserved (and we have advocated hard for reforms and changes in commissioning practice) but some of which is inevitable especially when money is tight and when charities don’t work together rather than compete hard.

I’m not blaming charities for this – the incentives they face lead them this way. I’m not blaming the many membership bodies in our sector – they are hard things to run.

I’ve met lots and lots of CEOs of charities doing this NPC job, and I know that deep down they all do want to achieve impact. It’s just that the system pushes them all over the place so that the focus on impact is downgraded. Some of the same is true for trustees of charities too.

There is lot we can do to improve impact, changing the funding model works; nudges via government, Charity Commission reporting and other requirements; easier, better data coming on stream; tech and other mechanisms to collaborate; and the kind of work NPC does to help people think through how they try to achieve impact and how they can do better. And of course, a public sector that wants to work with the sector.

I’m not naive. The sector will never be a sector dedicated to impact in a way that i might ideally want, any more than we are ever going to get a purely evidence-based government.

But the sector can improve. Can get listened to. Can work towards system change.

That is what NPC is all about. So here are my four key take aways:

• First, impact really matters – it’s a moral imperative.
• Second, impact has risen up the agenda – and we can take some credit for that at NPC. But it has sort of plateaued and is not as deeply embedded in as we need.
• Third, NPC has changed the way it thinks about assessing impact. This is not a static agenda, and it needs to keep progressing.
• And fourth, impact cannot be achieved through the actions of a single charity or funder doing better. We need to work together and influence government to create major change. And we need to think in systems and encourage more system leadership.

There is no point in beating about the bush – it’s been and will be a hard slog. This attempt to raise the bar in the sector so that everyone thinks about impact is a sort of collective good – in everyone’s interest in the end but nobody’s number one issue. So it’s very hard to get people focused on it and it’s hard to fund the work that needs doing. But it is important.

It’s been tough but I have been privileged to have been able to play a part and help us make some real progress.

So the work must go on. I look forward to NPC continuing to do that under its next leader and the sector being able to deliver more good social outcomes than ever before.