Focus: Finance and Governance - Outlook - Shout your impact from the rooftops

Biman Mittra, director of finance and administration at the Coram Family

The new Sorp 2005, which is mandatory for all charities whose accounting periods begin on or after 1 April 2005, will set new standards for the information that charities present in their trustees' or annual reports.

The challenge for many charities will be to adapt their reports to comply with the requirements of Sorp 2005 to show the effectiveness and impact of their work.

Most charities will already have systems in place to record service level agreements (SLAs) with funders, be they local authorities, government or trusts, and to map these against output targets they are contracted to deliver.

But many finance directors preparing trustees' reports will now need to consider not only internally generated and external contractual SLAs and outputs, but also outcomes and impact.

Assessing the effectiveness of outcomes will require charities to be clear as to the objectives they set themselves in their work and to have indicators, benchmarks and milestones against which the achievement of objectives can be assessed.

This will involve gathering quantitative and qualitative data to show that their objectives are being met. For many charities, and particularly those providing direct services, this could involve work to amend databases or other information-gathering systems to capture such evidence, perhaps on a centralised and real-time basis.

The measurement of impacts could pose a challenge for many, notably in how to measure long-term impact when a charity's intervention with its client group might be for only a short time. The costs of evaluation and commissioning longer-term research would be factors in any assessment of impact.

To implement Sorp 2005 in the spirit intended will involve charities being clear about their objectives and milestones, mapping these against the desired outcomes and the outputs they are trying to achieve - and ensuring that there is sufficient information and data collected to show this, with periodic evaluation and research where applicable (and affordable).

In theory, this sounds both simple and laudable. But it will require many charities to work and plan in different ways. It might also involve additional compliance costs, because many charities with local authority contracts might find it difficult to secure funds for proper evaluation of their projects or services. It will certainly require all finance and IT departments to integrate to a greater extent in mapping out and measuring the outcomes of the charity.

For those of us reeling from the work and expense involved in ensuring our trustees' reports pass muster with Sorp 2005, there is a chink of light. Those charities that can produce transparent and accessible reports that demonstrate the effectiveness of their work will stand a greater chance of attracting income from public donations or from local authorities and trusts.

In an increasingly competitive funding environment, in which the UK has the largest number of registered charities in Europe, this is surely a prize worth striving for.

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