Charities face tough new realities, with reduced income, falling donations and changes to commissioning generating uncertainty within the sector. To make life harder, criticisms of colossal salaries and unethical investments risk undermining the public’s faith in so many good and hard working charities (the Public Administration Select Committee took evidence for its inquiry into chief executive pay only today).

In other words, charity leaders really have their work cut out. So how should they confront these difficulties, balancing a focus on what they’re trying to achieve with a need to secure funding? We’d all like to think that mission drives everything each organisation does, but if it doesn’t make it through to next year, that mission will no longer exist.

For us, great leadership is about focussing on impact. Leaders too often approach impact as a marketing exercise; they’re interested in proving (not improving) what they do. Which is why it really needs to be embedded in practice, so it sits at the heart of decision-making, taking staff and trustees along with it and working around good systems and tools. At our upcoming Impact Leadership Conference (29 January), Sir Peter Lampl from the Sutton Trust will present on ‘Using evidence to improve: A frame of mind’, which puts it more succinctly.

Essentially, it’s built around a central principle that impact measurement needs to be designed to result in learning and improvement. This means critically assessing your performance year on year and looking for opportunities to change and refine what you do. It means being open to change and using failure as an opportunity to learn what went wrong.

Of course it’s not always easy to talk candidly about your failures, but it links back to the need to build trust and confidence among donors and the public at large—something William Shawcross, Chair of the Charity Commission, will focus on at the conference. By raising the profile of impact measurement, reporting the results (and learning) that it shows, and adjusting their strategies to ensure impact is maximised, charity leaders can begin to see off questions about running costs and CEO pay and point towards what really matters: the difference they make to people’s lives.

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