Should you be impact reporting?
Have you heard the joke about the corporate that invests a million pounds in the community, spends two million pounds measuring the impact and four million pounds shouting about it?
For the last five years ‘Impact Reporting’ has become an increasingly hotly discussed topic in Corporate Responsibility, and specifically Community Investment.
The focus has shifted from companies quantifying the inputs of money and time they invest in the community, to the impact those resources have had on beneficiaries: How many young people have entered long-term employment? How many older people have learned to use a tablet?
Impact Reporting is seen as important for both corporate accountability and benchmarking, but for many CR practitioners the process has proven to be costly, largely inaccurate and a burden on resources for their teams and charities alike.
The following article discusses the role of Impact Reporting and questions whether it is a red herring that diverts resources away from Community Investment. It also suggests an alternative approach which achieves the same aims – but at much a lower cost.
Why Measure Impact?
Google ‘Corporate Responsibility Impact Reporting’ and prepare for a wild goose chase. There is hardly any discussion on why Impact Reporting is important or to what extent companies are doing it consistently. Even the long-established London Benchmarking Group has just over 150 member companies – or about 2% per cent of UK companies employing over 250 people.
It is likely that Impact Reporting in companies seemed an obvious progression from Impact Reporting in charities but we need to make a distinction between charitable organisations that deliver services and businesses that provide resources to the former – and why they have different responsibilities in terms of reporting.
For organisations delivering services, measuring impact is of critical importance as it creates accountability, measures effectiveness and informs how services can be improved.
Good Impact Reporting from these organisations helps funding bodies – including corporate supporters – make the right decisions about which initiatives to support.
For companies providing resources, the information they collect should help set Community Investment targets, demonstrate that these are being met and communicate the value of Community Investment initiatives across all their stakeholder groups.
So What’s the Problem?
The joke we started with is, admittedly, more than a little cynical; but it does highlight two problems with Impact Reporting in companies.
First, measuring impact is complex and expensive.
Unless you follow a job-seeker around with a clip-board for the six months following your workshop: How will you know whether they entered long-term employment? How can you tell if it was your programme which made the difference, or a coincidental intervention?
Answering these questions creates a considerable burden for both CR practitioners and their charity partners. Numerous CR practitioners I’ve spoken to have admitted that doing their Impact Reporting often takes a month out of each year.
Secondly is that the value in Community Investment should be the investment itself, not the measurement or the related publicity – and the resources dedicated to each activity should reflect this.
Both issues can detract from high quality Community Investment, by either diverting CR resources away from investment to admin, or creating a preference for programmes designed or chosen for the ease of measuring impact, rather than because the impact is plentiful.
What’s the Alternative?
There is a temptation to recommend throwing away the detailed quantitative spreadsheet entirely. Instead dedicate the effort to choosing third-sector partners with care, based on their impact reporting; listening to them throughout the relationship and using a blend of qualitative feedback and gut instinct to report on, assess and improve your involvement. Sadly, this is not the approach all companies already take. With huge time savings in hand, couldn’t your resources be redeployed to doing more of the good stuff?
Yet, there is a reason we reach for quantitative measurement: it frames the magnitude of the initiatives and demonstrates the level of change.
An alternative to Impact Reporting which still provides this quantitative rigor is to consider ‘Community Value’ which is essentially the replacement cost to the charity.
That is, what the third-sector organisations you support would have to pay for comparable help if they were to procure it on the open market.
For example, you are a software development company and one of your employees takes a day to help a charity enhance their website. If the charity had to pay for a day of developer’s time in London it would be about £400, so that’s the replacement cost. If the same individual tidied the charity’s garden, he or she could arguably be replaced by a manual labourer working for the Living Wage.
This replacement cost refocuses your contribution on the value of the support to the charitable organisation and therefore provides a more interrogative approach than simply measuring the cost of the resources to your company.
It also wouldn’t demand the huge investment of time and energy needed to record impact or outputs because consistent assumptions could be used to value different types of time and in-kind donations which would make translating your inputs (e.g. hours of volunteering time) into Community Value comparably simple.
Finally, reporting on Community Value still fulfils the objectives outlined above in that it will help to set, meet and assess targets and clearly communicate the values of your Community Investment both to your internal and external stakeholders.
One way or another, it is time to challenge our approach to Impact Reporting for Community Investment. At Benefacto, we’ve developed our own method for organisations to measure and communicate impact reporting, GivX.
Where Do You Stand?
Is Impact Reporting a red herring or an invaluable tool in good CR practise? Can we find a more time-effective approach without losing oversight and communicability? Could refocusing on Community Value be the answer?
To read about our method of calculating community value, visit givX.org
This article was authored by Linz Darlington and Rob Powell and originally posted on ICRS News Blog
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