Against a dark background of austerity, double-dip recession and record levels of inequality, it’s no surprise the spotlight shines on the numbers—GDP growth, output, unemployment, credit ratings—the list goes on. And in the world of charities, it seems that the subject of impact falls into the same category—data, numbers and ratios.

We often debate what impact means—a discussion that’s usually about definitions and technical distinctions. But recently as I was talking about impact with a group of trusts and foundations, the question of what impact means ideologically was raised.

A concern was raised that the increasing focus on charities measuring their impact was motivated by a desire to marketise the charity sector. The more we focus on impact, the more charities compete with each other in a marketplace driven by contracts to deliver services. If we wait long enough, the big charities won’t look any different from Serco, the argument goes.

Understanding impact isn’t about making charities jump through hoops.

But I don’t think that’s what impact is about. A focus on planning, managing, and measuring impact means a focus on understanding the lives of the people that charities aim to help, and the changes they bring about in those people’s lives. By understanding this, they can work to make the biggest positive change possible. Impact measurement is a tool for social justice, not marketisation.

Take the charity The London Pathway, for example, which works within hospitals to integrate and improve healthcare for homeless people. It grew from a recognition that healthcare outcomes for homeless people were much poorer than for an average person—they are admitted to hospital four times as often, they stay in hospital three times as long—their overall health is much worse. By focusing on the needs of the people they aim to help, and understanding their life situation, The London Pathway has been able to massively improve these outcomes. And the reason it understands these needs, and can make a big positive change, is because it monitors the impact of it’s work. That’s social justice—better outcomes for people suffering multiple disadvantage.

The thing is that The London Pathway, and other charities that deliver outstanding impact for the people they help, not only improve lives but also save society a pile of cash. In the words of Harvard Business School Professor Michael Porter, it ‘is an excellent example of how a value-based approach can better serve patients, reduce inequalities, and deliver better outcomes that matter to patients per pound spent’.

At NPC we’re passionate in our belief that by focusing on impact—the real change they create in people’s lives and society—charities can achieve better outcomes for those who are worse off. And this will reduce inequalities and improve social justice.

Of course there’s a danger that impact measurement is used as a technocratic mechanism to bludgeon charities, favour those with the resource to build fancy systems and research methodologies, and marketise the sector. But if we really get to grips with impact, embedding it in charities’ practice and funders’ decision-making, what we can do is something much more positive, much more powerful: we can help charities to back up their passion and conviction with a compelling case that should help them get the resources their work deserves.

I hope we remember that understanding impact isn’t about making charities jump through hoops. It’s about putting the real changes to people’s lives at the heart of what charities do.

 

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