For those busy finalising their annual report, in all probability the priority will have been to make sure the financial statements are correct, often leaving little time for the front end - the part about the difference you have made to your beneficiaries.
But for me, that is the most important part. After all, charities are here to create great social impact (be that transforming people’s lives, saving the environment or countless other great missions), not just to keep paying the bills each year.
Unfortunately, many people in the charity sector often judge a successful year by growth in financial turnover rather than growth of impact.
My challenge to you is to change the way you write the impact section of your annual report. The traditional method of trying to prove the success of your charity by publishing large numbers of people ‘reached’ or ‘helped’ does little to build trust. Similarly, one or two case studies, which only talk about success do not describe the challenges you have dealt with during the year. They also say very little of the risks you took to try new ways of tackling the social issues, or whether you were successful or not. They certainly don’t tell us what you learnt – perhaps the most important thing.
Charity work should be difficult, and that is a good thing - changing the world is not easy! Charities need to take risks and in doing so won’t always get everything right. We should talk more openly about failure in the same way we talk about success – we should celebrate it as a virtue and share our learning openly.
Taking a more transparent approach engages your audience, builds trust and throws light on the challenges your organisation faced during the year, which subsequently allows supporters to see where they can help you make more of a difference. Younger donors and supporters do not just like transparency, they expect it. Millennials and Generation Z can find everything they want in an instant on their smartphones, and authenticity and trust are key elements of what they are looking to support.
Unfortunately, great examples of transparency are a little scarce on the ground but there are some pioneers of a more transparent approach out there.
Page 21 of Clic Sargent’s 2018 impact report talks openly about some of the challenges it faced during the year in an open and honest way. It engages the reader to truly understand the challenges they are grappling with.
Restless Development make available a whole range of internal documents that you wouldn’t expect to see publicly on its website including financial performance, policy documents and board papers.
Catch 22’s 2018 impact review has a dedicated section on ‘What We Learnt’, which engages the reader to understand more about the tough social issues the charity is dealing with.
And of course there is the groundbreaking work my team and I undertook when I was CEO of Street League, most notably our 2016 Transparent Annual Report, which talked up-front about the young people we failed to help that year, and our 2017 online impact dashboard (updated to the current version in 2018) where we linked our internal database to the website.
So why don’t more people report their impact transparently? Since leaving Street League in January this year I set up Trust Impact to help charities develop more transparent impact reporting and we’ve identified some common themes.
1) There is often a perception that impact is very complex, time and resource consuming. It can be, but it doesn’t need to be.
2) There is a tendency to over-complicate measurement and to try and measure things that are well beyond the scope of the organisation’s ability to measure.
3) Often people employed to measure impact within organisations tend to take a very academic approach, which while rigorous, doesn’t often produce what the organisation needs in terms of understanding its impact and straight forward messaging.
4) The traditional ‘prove you are successful with large numbers and a couple of case studies’ model has more or less worked for the past few decades so why change it?
My advice has always been to keep things simple and start with something you feel comfortable with, build trust and help your team and stakeholders gain confidence from there. There are also some amazing tools to help visualise data available online now like Microsoft Power BI, which are relatively cheap and user-friendly to help you produce some incredible visualisations.
So, why not take another look at your draft annual report. Is there an opportunity to talk about the challenges you faced? To be more transparent? Could you replace the big numbers with information about what you learnt instead?
Matt Stevenson-Dodd, managing director, Trust Impact.