Charities must tell donors about what they achieve, says think tank

They need to improve the way they report the outcomes of their work, advises New Philanthropy Capital

Impact reports
Impact reports

Charities are failing to communicate the things that potential donors need and want to know, according to a sector think tank.

New Philanthropy Capital publishes a report tomorrow that examines the impact reporting of 20 large fundraising charities. It concludes that charities must improve the way they report the outcomes of their work.

"Charities are much better at talking about what they do than why they do it and what it achieves," says the report, Talking About Results.

Martin Brookes, chief executive of NPC, also told Third Sector he was exploring the idea of a campaign to make it a statutory requirement for charities to share their data. He said that when you opened up data "lots of valuable things can happen".

NPC looked at the annual reports, annual reviews, impact reports and websites of 20 of the top 100 UK charities by fundraising income and found that only 41 per cent clearly communicated what changes they achieved in people's lives.

Ninety per cent of charities were good at describing what they did, it found, but only two-thirds talked about the problems they addressed.

Tris Lumley, head of strategy at NPC and one of the report's authors, said: "If charities today are to compete for the dwindling financial resources that are available to them, they have to be able to demonstrate the results their work achieves."

He said that research such as the Charity Commission's recent Public Trust and Confidence Survey showed that donors thought the two most important factors in trusting charities were how the money was spent and what charities achieved.

Lumley said that one way to tackle the problem would be for charities to share the data they collect about their impact and the quality of their services. Charities could learn a lot from each other, he said.

Brookes said charities existed at the discretion of the public and received tax breaks because of their charitable status, and thus had a duty to be open about reporting their results.

"There are always risks when opening up data - but it can work when done thoughtfully," he said.

A Cabinet Office spokeswoman said that, although it encouraged data sharing between charities, there were no plans to legislate for this as it was committed to reducing bureaucracy.

The report is available tomorrow at www.philanthropycapital.org.

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