What makes a ‘good’ charity?

Ian Oakley-Smith of PwC has written a series of excellent blogs on the Nine hallmarks of a successful charity. They make helpful, practical reading, with advice on how to plan for a rapidly changing environment, the need to assess risk and the importance of transparency. I was particularly interested in the blog about business and operating models, and the prompt for charities to consider whether these remain fit for purpose or if it’s time to rip up the old ways of doing things, and how this could require a change in culture.

Such language is not always used in the social sector, but getting this more business-like perspective is invaluable. And I wouldn’t argue with any of the points made—Ian’s many credentials include being an insolvency practitioner so I know who I’d call if, as a trustee, I feared my charity is heading for the rocks.

But the difference in perspective is telling. Ian talks about a ‘successful’ charity. But does that equate to an  ‘impactful’ charity? To be sure, if a charity is ‘successful’ then it is more likely to generate impact. A failing charity will struggle to do enough to support its beneficiaries. However, at NPC, we see there are additional ingredients needed to truly create impact such as focusing on where the need is greatest, learning from impact measurement and involving service users in programme design.

NPC’s own version of the Nine hallmarks is The little blue book, and this considers, and indeed grades, six areas:

• Activities: Is the charity doing the right thing in the right way? Does it have a coherent strategy or theory of change?
• Results: Is the charity able to evidence its impact? Does it have a culture of measuring impact and learning from it?
• Leadership: Does the board and leadership team set clear goals, and demonstrate managerial competence? Is the skills mix right?
• People and resources: Does the charity make the most of its human, physical and brand assets?
• Finances: Is the charity’s financial management sound, and how risky is the charity’s financial position in terms of income diversification and reserves?
• Ambition: Is this a charity that really wants to change the status quo?

The little blue book was published in 2010 and has proved popular since—being downloaded nearly 12,000 times. And Keeping account, our guide to charity financial analysis which expands on the finances section of The little blue book, shot into our top ten most downloaded publications in just over a year. But now we are considering a refresh, changing the emphasis of what is really important. We know more now about the ‘soft’ side of what great leadership looks like. We advocate measuring and monitoring less, but acting on what is learnt from more—‘treasure that you measure’ rather than just reporting it to funders. And we’ve learnt about the importance of stakeholder engagement; not just funders, but users and beneficiaries too.

So if you have views on what is important to a charity’s impact and how to know if it is doing ‘good’ then please do get in touch.