In an increasingly competitive environment, it is paramount for any organisation that depends on attracting funding to measure the impact of their work—not only to create an engaging narrative but to improve the effectiveness of services and deploy resources accordingly.

Just ten years ago, impact measurement was rare and imprecise. The past decade has seen a transformation in tools that afford charities, social enterprises and voluntary organisations the opportunity to measure the impact of what they do. At yesterday’s Annual Impact Measurement Conference, experts gathered to discuss practices across the sector and look to its future. To coincide with the conference, NPC launched its Making an Impact report, which seeks to understand what progress has been made in impact measurement and identify steps to be taken by charities, funders and government.

We know impact measurement is worthwhile. Charities strive to improve the effectiveness of what they do and this is only possible if they can gauge the impact of their existing services. And with competition increasing over grant funding and donations, charities are under mounting pressure to demonstrate how they are making a difference. The real question is how to best measure this impact. Detailed frameworks have sprung up and rigorous measurement tools exist for the vast majority of social outcomes, but the opportunities offered by this kind of analysis have not been grasped by all.

Evidence from Making an Impact  shows that half of charities who increased their impact measurement did so to satisfy funders. Only 5% say that wanting to improve services was a primary motivation for increasing their efforts; and yet, improved strategy and services, as well as the ability to demonstrate impact, are the main benefits they see. Small charities are the least likely to try to gauge their effectiveness. Almost two in five say they are under too much pressure to measure impact, and one in four say they could spend money better elsewhere. With growing demands to deliver more public services as a fall in funding and the shift from grants to contracts add to a challenging economic environment, how do we help charities access the potential benefits of impact measurement?

Our speakers discussed the evolution of impact measurement as well as options for building measurement frameworks—what tools to use, how to make sense of the data and communicate its value. We also heard case studies from Elizabeth Harper at St Mungo’s on the ability to aggregate data helping to improve its focus on women, and Maria Stephens at Toynbee Hall on the success of NPC’s Well-being Measure, which has spread to the rest of its programmes.

Our keynote speaker, Minister for the Cabinet Office Francis Maude, acknowledged that governments have often fallen short in turning warm words about the voluntary sector into action. This Government, he says, will support a more independent voluntary sector by creating a powerful social investment market in the UK to act alongside traditional philanthropy and government grants. The Cabinet Office aims to achieve this by supporting the development of Social Impact Bonds (SIBs) in two ways: by exploring an ‘Outcomes Finance Fund’ to make it easier for public bodies to issue payment-by-results contracts and social impact bonds for charities; and through the creation of an SIB ‘Centre of Excellence’ to provide practical advice and support to SIB developers. The future points to a radically different funding environment—and one, Maude says, that must include impact measurement. This is why the Cabinet Office is helping to drive our new programme Inspiring Impact, which aims to  bring together low-cost approaches and shared frameworks within subsectors to ultimately make impact measurement the norm.

Read about and comment on the events of the day here.

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