Principles of Impact Reporting

Charities and social enterprises that hope to engage, inform and inspire their stakeholders try to communicate clearly the impact of their work. All charities, community groups and social organisations should tell their stakeholders how they are fulfilling their purpose and achieving the change that they seek.

Good impact reporting helps beneficiaries, volunteers, donors and other supporters understand and engage your vision. It also helps staff, volunteers and trustees focus on results and work to achieve that vision.

How should charities communicate their impact?

There are six general principles that define how charities should communicate their impact:

• Clarity: The reader can quickly and easily understand the organisation through a coherent narrative that connects charitable aims, plans, activities and results.

• Accessibility: Relevant information can be found by anyone who looks for it.

• Transparency: Reporting is clear, open and honest.

• Accountability: Stakeholders (including the people who benefit from the charity’s services) have the means to hold the charity to account for its actions.

• Proportionality: The level and detail of reporting reflects the size and complexity of the organisation.

• Verifiability: Claims can be verified externally, and the charity shows where it has been subject to peer review or external audit.

What should charities communicate about impact?

There are six specific principles that define what charities should communicate about their impact.

Clear purpose

What needs or problems are we trying to address?
Why are we here? What is our mission? Why us rather than anyone else?
What is our vision? What change are we trying to bring about? What do we want our impact to be, and over what timescale?
What do our key stakeholders want us to achieve?

Defined objectives

What do we aim to achieve? What are our measurable short and long-term objectives?How do these objectives help us achieve our vision?

Coherent activities

What are we doing to achieve our objectives? What are our activities, outputs and expenditure? Are our activities part of a coherent plan?
How do these activities achieve our objectives? What is our ‘theory of change’—our plan showing how our activities lead to change?

Demonstrated results

What are we achieving and how does this compare with our objectives? To what extent are we contributing to our overall goals?

Evidence

How do we know what we are achieving? Do we have appropriate evidence of these results?

Lessons learned

What are we learning about our work? What are the unintended consequences of our work (positive or negative)?
How are we communicating what we are learning? Are we sharing knowledge, publishing results and collaborating with other organisations?
How are we using what we have learned to improve what we do? Are we revising our strategies, programmes, activities or operations?

Applying the principles

The principles of good impact reporting guide charities and social enterprises through communicating their impact. This could include:

• annual reports, annual reviews and impact reports;
• management information, board reports and organisational reviews;
• reports to funders, supporters, investors and commissioners;
• communications materials, such as websites, brochures and leaflets;
• fundraising materials;
• key messages about the organisation; and
• communications with, and feedback and responses from its beneficiaries.

If applied appropriately, the principles can help you to:

• be accountable to your stakeholders, engaging them in open and honest dialogue;
• engage and inspire supporters and potential supporters;
• review your activities and impact against your vision and purpose;
• challenge your assumptions and revise strategies and plans; and
• ensure that you are helping your beneficiaries in the best way possible.

From the document "Principles of Good Impact Reporting", a collaboration between seven organisations New Philanthropy Capital, Acevo (Association of Chief Executives of Voluntary Organisations) incorporating the ImpACT Coalition, CFDG (Charity Finance Directors Group), the Institute of Fundraising, The SROI Network, NCVO (National Council for Voluntary Organisations.