Mencap has recently brought out an impact report to inform donors, primarily through case studies, exactly what the charity has achieved in the past year (Third Sector, 30 October). The charity is following closely in the footsteps of the RNID which published a similar report last year.
Such reports are vital to keep stakeholders involved in the organisation and are extremely attractive to donors. The opportunity to show exactly what donations have helped to achieve can be a great help to fundraisers.
All charities should be thinking hard about how to demonstrate their impact. The Strategy Unit report on charity regulation and law has suggested bringing in a compulsory statement of impact for any organisation with an annual income or expenditure of more than £1 million. This would be submitted to the Charity Commission and organisations are encouraged to make it available to stakeholders.
The annual reviews that organisations often send out to stakeholders are woefully inadequate. They often provide little more than some public relations fluff, accompanied by a weak attempt to provide some idea of income and expenditure for the year. An impact report gives the organisation an opportunity to prove what it has achieved, and also to explain if things have not gone according to plan.
If compulsory reports are introduced, the question arises of how these reports should be assessed. It could be left to the public and the press.
If a charity makes public its aims, it will be held up by the media if it doesn't achieve them.
But it seems rather haphazard to leave the regulation of the sector to the press. This would not be an effective way of ensuring that reports are not reduced to the fluff that many annual reviews contain. If compulsory impact reports are to be introduced, they must be assessed properly using professional auditors.