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Charities not informing donors on impact, says new report

Governance | Vibeka Mair | 22 Sep 2010

Charities are failing to effectively communicate their impact to potential donors, according to a new report from New Philanthropy Capital.

NPC analysed 20 of the top 100 charities by voluntary income, looking at their impact reports, annual review and information about impact on their websites.

NPC found only 65 per cent of the charities reviewed clearly communicated the nature, scale and impact of the problem they were addressing.

While almost all charities (90 per cent) were thorough and comprehensive in presenting outputs of their organisation, only 41 per cent explained their impacts on beneficiaries.

Further, only 35 per cent of annual reports contained evidence to support a charity’s outcomes – none of the reports were judged to supply the reader with high-quality evidence.

Charities were also reluctant to admit failures, with less than half (45 per cent) talking about what they were learning and improving, or mentioning challenges or failures they had encountered and how they were learning from them.

NPC also said it found no examples of good practice, in terms of charities reporting on progress against their overall long-term strategic goals.

The report said charities in general were missing the opportunity to communicate to potential supporters what they need and want to know:

“When surveyed, donors consistently say the two most important factors in trusting charities are how the money is spent and what it achieves,” it said.  “For ‘informed donors’, annual reports, annual reviews, impact reports and charity websites will be their first port of call to find out what they want to know. If charities are not communicating their impact in these materials, donors will look elsewhere for those that are.

“NPC believes that the informed donor will become increasingly important to charities as they struggle to survive the coming storm of public spending cuts, and pressures on individual, foundation and corporate giving. Those charities that equip themselves now to communicate with these donors will be better prepared to compete in these difficult times.”

To read the report, which includes advice on improving impact reporting, click here.

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Directory: New Philanthropy Capital