What is the point?

Last Monday saw the launch of two landmark publications in progression towards a more effective voluntary sector. The Inspiring Impact programme has launched the Code of Good Impact Practice for charities and the comparable Funders’ Principles and Drivers of Good Impact Practice for trusts and foundations.  Both are excellent documents and represent further progress to a more effective and efficient voluntary sector.

The advice in both documents is sound. The principles include: take responsibility for impact and encourage others to do so too;  apply proportionate and appropriate methods and resources; consider the full range of the difference you make; be honest and open, and; be willing to change and act on what you find.

All good stuff, but, as we find in giving advice to charities and funders on how to measure their impact, these are difficult to hold to when faced with shrinking funds, increasing competition, and expanding needs. It is all too easy to under-invest in an honest, credible, and rigorous assessment of your impact or, just as bad, over-invest in measuring the wrong things.

Things can go wrong when charities or funders start to forget the basic reasons for assessing their impact. These can be summed up as to “prove” and “improve” your impact. Who doesn’t want to do these? But another Inspiring Impact publication goes further. Are you leading for impact? provides reasons for managing your charity to maximise its impact. As well as helping charities improve their services and raise more funds the report also notes that focusing on impact can motivate staff and help set your strategy. So far so good.

But this raises the troublesome question. Why does Inspiring Impact coalition (which includes NPC) feel the need to persuade charities and funders they should maximise their impact? At a conference on measuring outcomes that I recently chaired, one respondent bemoaned the dominance of technocrats and the paucity of motivational speakers on the platform.  Why do charities and funders need to be motivated to focus on measuring and maximising their impact?

NPC is very committed to the Inspiring Impact programme, but at times I think the programme is like the CBI, the Institute of Directors, the British Chambers of Commerce, and the Federation of Small Businesses coming together with the aim of persuading and helping businesses focus on generating a profit. This would be absurd. Businesses exist to make profit and don’t need persuading. But don’t charities and their funders similarly exist to create an impact? Why is the Inspiring Impact coalition needed in the voluntary sector, but would be unnecessary in the private sector?

The answer that springs to my mind is that the purported benefits of focusing on impact are clearly not self-evident and taking on this challenge requires a belief that it is the right thing to do. Organisations in the voluntary sector do not, in practice, focus on maximising their impact in the same way that businesses seek to maximise profit for a number of reasons. It is difficult, it can be costly, and it carries risk that a serious effort to measure your impact may not provide as positive results as you expect.

A further challenge is that having a high impact is often decoupled from funding. Chief executives of charities may find it better to chase funding than try to maximise the impact of their charity (though they may think these are one and the same). If chief executives and their charities benefited more from increasing their impact than from increasing their funding, Inspiring Impact would not be needed. Until then, unfortunately, it is.