Over the past few years I have seen an increasing focus on impact reporting and reflecting this within the financial statements. Often, this is seen in charities reliant on external funding such as grants and fundraising income. This not only demonstrates that the funds have been spent effectively, but with the increased competition for funding, it is vital for charities to be able to demonstrate their benefit to secure future funding.
With the pressure on charities to clearly articulate impact, should grantmakers be held to a similar standard? Increasingly and to keep pace with the wider charity sector, I feel the answer is yes.
Impact reporting can seem daunting, but it doesn’t need to be. There are some simple steps that grantmakers can take to make this effective, from the initial collection of data to then sharing this in a way that is open and easy for stakeholders to access. More than ever, with the financial pressures facing charities throughout the UK, transparent reporting will only enhance the trust and accountability of grantmakers.
Key principles of impact reporting
- Purpose – outline why the charity exists and what the key themes or programmes are.
- Aims and objectives – set out the key aims and objectives for the charity.
- Grants awarded – outline what grants have been awarded in the year alongside each theme and document the outputs and results from the grants using relevant evidence.
- Lessons learned – consider any improvements or changes made as a result of the lessons learned. It could be there are negative or ineffective outcomes which also should be considered to provide a balanced view.
Collecting evidence
In some ways it is harder for grantmakers to demonstrate the impact of their grants as they are one step removed from the output. However, as there is the responsibility on the grantmaker (and trustees) to ensure the funds have been spent appropriately and in line with the charity’s charitable purpose, I would normally expect to see monitoring arrangements or reporting back to grantmakers from grantees to ensure the terms of the grant agreement are being met. These reports may include specific metrics agreed at the outset of awarding a grant, or progress reports with photos, for example, for a capital project.
From some of the discussions I have had, grantmakers have raised concerns that they do not have the detail or the time to complete analysis on datasets. However, as mentioned above, by using photos, the data used doesn’t need to be quantitative. Often the most effective discussions have come from when grantmakers have visited a grantee and seen first-hand how the funding is making a difference. Collating information through surveys, interviews and observations during such visits can often bring to life the impact a funder has had, making this easier to communicate to a wider audience in an impact report, on a grantmaker’s website or in the financial statements.
Reporting and communication
The majority of the grantmakers I work with don’t produce a publicly available impact report and keep their financial statements purely as a compliance document. Given the increasing pooling of information about funders on websites such as GrantNav and 360Giving, it is clear that there is a shift in the importance of these documents, for those seeking grants, and wiser stakeholders.
A few simple considerations to include impact reporting in publicly available documents are:
- Include a CEO or chair report to tell the story of the year in a way that is not bound by compliance.
- Use infographics to highlight headline figures, for example total grant funding in terms of number of grants awarded and monetary spend.
- Use charts and tables to break down the text and visually show the split of grants between different themes, aims or programmes.
- Use quotes directly from grantees about how the grant has been spent and the impact it has had on their beneficiaries. Tell stories of the grantmaker’s visits and include photos to visually bring to life how the grant has been spent.
I know how important grant funding is to not only keep charities operational but to extend the vital work they are doing to support their beneficiaries. While this does stem from a point of transparency and trust, for me, it is just as important to celebrate the impact of grantmakers in society. Sharing this through impact reporting is another step that can be taken to highlight this importance.
Siobhan Holmes is a director at haysmacintyre
