New Philanthropy Capital is calling for the siphoning off of 20 per cent of Capacitybuilders’ budget to bankroll a fund which will work to improve impact reporting among charities, claiming the government has not challenged the sector enough to improve its performance.

The creation of an ‘Impact Fund’ is one of a number of recommendations called for in the philanthropy adviser's pre-election manifesto, released today. NPC also claims that up to £150m could be saved by standardising reporting and evaluation frameworks for charities which receive grants or contracts from government, saving charities from repetitive or unnecessarily onerous reporting on different programmes.  

In arguing for the redirection of 20 per cent of Capacitybuilders’ funding (equivalent to £6m this financial year) to the development of an Impact Fund, NPC suggests that understanding effectiveness should precede the building of capacity.  

“Capacitybuilders is committed to improving the capacity of the third sector and ensuring that its investment, and that of government more broadly, is informed by high-quality data and analysis. But it cannot achieve these goals without first helping charities better measure their impact,” the manifesto argues.  

The organisation claims that “rhetoric is running ahead of reality” in movements on impact reporting, particularly as commissioners have historically been reluctant to fund the cost of programme evaluation. It suggests that action to improve impact reporting must be taken soon as some politicians are already floating the idea of paying charities “by results”.  

Government needs also to reduce waste involved in forcing charities to submit to different evaluation regimes and preferences when dealing with different funders, and standardise the reporting framework for all public grants and contacts, NPC argues. Following on from that, the body for the information received via these reports to be made public, much in the same way as the performance of other public services will be soon be made publicly available.  

Martin Brookes, chief executive of NPC, said that there is space for a wholesale review of the way government and the sector relate to each other. “This election offers a great opportunity to review the way government works with charities and philanthropists. We believe there needs to be a sharper focus on social impact. Unless greater emphasis is placed on impact, it will be difficult to  know whether charities are delivering public benefit and taxpayers’ money is being well-spent,” he said.  

Promote better quality philanthropy, as well as greater quantity

The organisation, which provides philanthropy advice and research on effectiveness, also criticised the government for offering “no incentives for effective philanthropy”, focussing instead on tax incentives to increase the quantity of donations.  

Government should develop partnerships with philanthropists and trusts themselves, NPC argues, in the form of match funding for pilot schemes and similar initiatives.

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Use Capacitybuilders cash to fund impact reporting body, says NPC

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Directory: New Philanthropy Capital
Who's Who: Martin Brookes