Charities increasingly have to demonstrate their effectiveness to members of the public in order to secure funding for their services, delegates at a conference on impact heard yesterday.
David McCullough, chief executive of the Royal Voluntary Service, who took part in a panel discussion about impact leadership at the event in London, organised by the Charity Finance Group and New Philanthropy Capital, said the sector had moved "fairly well" towards demonstrating its value and effectiveness.
"Social impact bonds are starting to flourish and people need to be technical about their value and effectiveness," he said. "But the external environment is shifting from showing effectiveness to people who might pay us to deliver our services to the need to demonstrate effectiveness to members of the public. Why is that happening? Principally because the money is running out."
McCullough said one of RVS’s services in Leicester, working with older people when they are discharged from hospital, has halved unplanned readmission rates, which demonstrates good financial impact for the local NHS.
He said that local authorities, hospitals and clinical commissioning groups were trying to figure out what they were going to commission, meaning the RVS has had to persuade older people themselves and their families about the effectiveness of their services.
"We are moving from being quite comfortable demonstrating impact to commissioners with numbers and stats to demonstrating impact to people, consumers and families," he said.
Speaking at the same session, Charles Nall, finance director at Moorfields Eye Hospital in London, said charities needed to get to grips with big data or face not being the providers of social change in the future.
"The rise of big data means we have the ability to track problem families across multiple agencies, incidents of criminality and interactions with housing," he said.
"This is possible with many forms of charitable endeavour. If you are not learning to manage your data or developing algorithms from the sets of data, charities will cease to be the go-to organisations for defining society’s problems."