Out of proportion?

Funders are wonderful. Without them, much of what charities do wouldn’t get done. But as any charity will tell you, funders can also be a nightmare – not just when they won’t fund you, but also when they do. They want to know whether their funding has been used in the ways you promised, if it’s made a difference, and what you’ve learned along the way. That’s true for most (but not all) grant-makers, and it’s certainly true for most statutory funders, who are spending taxpayers’ money.

So what?, you may ask. Charities are free not to apply for funding. And anyway, isn’t NPC meant to be quite keen on this impact reporting stuff?

True. But we’re also keen on having everything in moderation. And there’s something strange going on in the land of commissioning (apologies to international readers – this post is focused on the UK). Have a look at these three quotes from official guidance:

Funding bodies should seek to minimise the monitoring and inspection burden on the recipients of funds to a level proportionate to the level of funding and risk, and which maintains proper control of public monies. (HM Treasury)

Our interviewees suggested that councils [should] take a streamlined approach, ensuring that… performance monitoring is appropriate and proportionate to the service provided and the level of funding… (Audit Commission)

Government recognises that monitoring and reporting should be proportionate – that is, they should be fair in the requirements they place on both recipient and funder. (Cabinet Office, Office of the Third Sector)

That all sounds clear and sensible, but is this what actually happens? No, it isn’t, as far as we can tell from our own research and that others:

There is a convincing body of evidence that many third sector organisations are finding the level of monitoring inappropriately burdensome… There was strong evidence from third sector organisations that funders do not link monitoring requirements proportionately to size of organisation or level of funding, despite good practice guidance. (Charities Evaluation Services)

…it is not clear whether a high reporting burden persists because:

  • the guidance is not followed;
  • the guidance is followed and the reporting burden would be higher if it were not; or
  • the guidance is followed but in practice it does not lower reporting burdens. (New Philanthropy Capital)

Around half of the charities who responded to our survey consider funders’ requests for results information to be disproportionate to the funding available. (New Philanthropy Capital)

So what’s going on? In our most recent research on the topic, all but one of our (commissioner) survey respondents said that they think their reporting requests are proportionate. Perhaps that’s what you’d expect. But the same could be said of the charity respondents quoted above. What’s worrying here is that it’s not clear that commissioners know this is how many charities feel – they’re probably less frank when they speak to their funders. Little wonder, then, if nothing changes. We’re hoping that by researching the issue using anonymous surveys, we can show commissioners that there may be a problem. Hopefully that will make them look again at the guidance. And if it doesn’t, it’s up to charities themselves to turn the tables by raising the subject of standard reports.