How do we measure the success of a charity?

Introduction

It's easy to measure the success of a company – profit, turnover, share price – to name but 3 ways. It is much harder to measure the success of a charity or not-for-profit. The ways will vary from organisation to organisation, cause to cause and strategy to strategy. There is no universal way to decide whether a charity is doing a good job.

This is not a problem unique to charities. It's hard to measure the success of hospitals, schools, universities and even the government. Yet the first three of these have some types of measure – typically a league table or a regulator, or both. And governments have an electorate and elections. Charities have none of these.

Towards a set of common standards for measuring any charity

This blog looks at what a uniform set of standards might look like for measuring the effectiveness of a not-for-profit, and how they might work. I don’t dispute for a moment that measuring the success of a charity is not easy, but that doesn’t mean it isn’t important. Or that we shouldn’t try. Here are some measures by which we might do so.

How are they delivering the mission?

Every charity has a mission and a vision. Any set of standards would need to look at that mission and vision and decide how well the organisation was doing in delivering it.

Are the staff and volunteers happy and informed?

Every staff member and every volunteer has a role in the effectiveness of an organisation. A happy, informed staff and volunteer body has a big role in the success of an organisation. High turnover rate, low levels of training and development, and distant management will all impact organisational success.

Are the CEO and the senior staff team leading the organisation

The job of the CEO and the senior staff team is to lead the organisation. To tackle problems, develop programmes, set plans and ensure the whole is more than the parts. There are many charities where the CEO and senior staff have become complacent, fallen asleep at the wheel, or decided that business as usual is good enough.

Is the board leading the organisation?

In my book, the board the trustees has a key role in leading the organisation alongside the staff team. The board's role is about scrutiny, suggestion, strategy and oversight. They are rarely in the driver’s seat (though they are in organisations with no staff, of course) but in healthy co-operation and challenge with staff to create the best possible organisation.

Is the direction of the organisation clear?

Because the metrics by which the success of a charity is measured are less clear, a good strategy becomes even more important. As the old proverb goes, ‘if you don’t know where you are going, any road will get you there’. It's critical that the strategy and direction for an organisation are set out and understood – everybody should be able to answer the question ‘how do we want to be different in 3 years?’

Are the finances healthy?

Some organisations are lucky. Where the money comes from, and where it goes, is no problem. But in today’s world, many organisations struggle to raise the funds they need, or have problems spending those funds effectively, or both.

Is the image and communications of the organisation effective?

Image and communications are as important to the success of the organisation, as finances and services: not least in an age of social media, AI and digital. Does the organisation’s image do justice to its work? Does it use communications to punch above its weight?

These are my starters for ten on some of the areas that any set of standards for measuring the success of a charity might include.

How might it work?

Standards are one thing. A mechanism for assessing them another. Here are some of the issues in putting them into practice.

Agreement of the standards

The standards would need to be agreed by a group from across the charity sector. It would take a while to develop the standards, but it's been done for schools, universities, and hospitals; it certainly should be possible for charities.

A steering group to develop and steer the idea

Any set of charity standards would need a group to steer and develop the idea. It would be responsible for listening to users and making the standards the very best they can be.

An accrediting body and a group of consultants to assess the standards

There would need to be a group of consultants, and possibly an accrediting body or shepherding body, to put the standards to the tricky task of measuring the success of organisations. It could be that there are different tiers of measurement, the lowest being self-assessment and the highest being more rigorous, and done by external agents.

Tools to help assess standards

These consultants would need tools to help them do their jobs – standardised core questions for staff and volunteers, for example. Common ways of measuring fundraising, finance, communication and brand effectiveness, and even mission delivery.

Collective measurements and weakness spotting

Part of the role of the steering group would be to see how well the standards work in practice, and where they need development and refinement.

Certification of standards met

It would be really good to have a mechanism by which charities could say they are meeting the standards and tell the world about it.

I don’t pretend this is a straightforward idea. There would be lots of hurdles before it came to fruition. It would never be perfect. The critics would always find something bad to say about it. But I absolutely believe in the mantra ‘perfection is the enemy of action’. If we believe that it would be good to have better ways of measuring the success of charities, then we should start on that journey.