Give painted road marking

Why impact is more important than ever

By Matilda Macduff 13 November 2012

Charity has hit the headlines again today, with the release of NCVO and CAF’s report UK Giving 2012, which revealed that levels of charitable giving have fallen significantly over the past two years. Given the economic climate, this figure shouldn’t come as a surprise, although that doesn’t make it any less worrying for charities. Combined with the significant knock to statutory funding which we explored in our research into commissioning earlier this year, it leaves charities facing tough competition for increasingly scarce funds.

Thinking about impact may not be at the front of charities’ minds when they’re struggling to find finance to keep going at all, but I think there are two compelling reasons why stopping to think about what you’re achieving is essential.

First, an issue of trust. Scrolling through the comments on the BBC’s coverage of the report, it’s amazing how many people seem to believe charities will waste their money, and therefore don’t donate. Whether they bring up the old admin costs issue, or hold the more extreme view that all charities are outright scams, at heart there’s an issue with communication. Charities need to be vocal about what they are achieving with the money they receive from the public. Donors may or may not consciously think about impact when choosing charities, but the real issue is the way charities are perceived by the general public, something that is bound up in the way we talk about what we achieve.

Second, being clear about how you make a difference to people’s lives can help charities make tough decisions about their limited resources. Knowing where and how you make an impact, through working out a theory of change, for example, means charities can identify where their work is critical, where others are doing similar work, and where they can afford to reduce a service. Thinking in this way, always with the impact you want to achieve in mind, can help minimise the effects of these financial strains on beneficiaries.

The headlines today may have focused on the drop in giving, but the report contains a wealth of useful information for the sector on who is giving, how they’re doing it and what they’re giving to. One statistic I found interesting was the level of giving amongst higher earners, for example: although those in managerial and professional groups are consistently more likely to give, the percentage of people giving and the amount given have both decreased. Clearly everyone is being hit by the recession, but these figures once again raise questions around the culture of giving in the UK.

With two major sources of funding suffering so much, the pressure is on for trusts and foundations and major philanthropists to plug gaps. We hope our Money for good research into high net worth donor motivation, which we plan to launch early next year, can help charities understand more about tapping into the second of these groups.

In the meantime, have a look at NCVO and CAF’s Back Britain’s Charities campaign, which sets out a manifesto for supporting the sector through a difficult time –  including encouraging charities to sign up to be part of Inspiring Impact.