Banking on Outcomes

The sector should share the methods it uses to measure its impact in an outcomes library to help charities prove their value to funders, according to a study published by the New Economics Foundation.

The think-tank suggests a ‘common indicator bank’ could work as a reference library, holding lists of possible outcomes for third sector projects and collating indicators from academics, sociologists and psychologists, such as of wellbeing or social inclusion, that organisations could use to measure them.

The New Economics Foundation (nef) is working on a pilot project with London-based charity Toynbee Hall (pictured) to test out the feasibility of its proposals.

In the report, Banking on Outcomes, published in conjunction with the Performance Hub, nef asked 35 third sector organisations, non-statutory and statutory funders whether they supported the idea of an indicator bank. Half were in favour of the proposals, with two organisations against it and the rest remaining undecided.

The greatest support came from statutory funders, with seven out of the nine bodies asked favouring the idea. One statutory respondent said it would “definitely use it” and another said it was what was needed to “evidence value for money”.

However, most third sector organisations and non-statutory funders remained undecided about the bank and nef acknowledged in the report that it could have its drawbacks. It said the indicators used may not be relevant or useful outside a local or sector context, and some frontline organisations felt their unique standpoint would not be reflected.

Yet the research found that third sector organisations were already informally sharing outcomes and indicators, with half of the 18 surveyed reportedly sharing their indicators externally with other organisations.

The pilot at Toynbee Hall will look at a number of the charity’s projects to assess their outcomes and identify the possible indicators that could be used to measure their impact.

Milla Gregor, evaluation and research manager at Toynbee Hall, said while there was an abundance of advice for organisations on evaluation methods and approaches, little information existed on what they could use to really measure the outcomes of their work.

“Nobody says ‘look there’s loads of these indicators and here’s a list of them’. It’s that nitty-gritty information about what indicators we can use; it’s those very, very practical indicators that I think is missing.”

Nef’s report found that third sector organisations often struggled to measure their impact as many found it too difficult or too expensive, or they felt they should focus on delivery.

It called on non-statutory funders to provide more support for evidence-gathering by the organisations they fund, a move it said could help “drive government commissioning and procurement towards outcomes, rather than less useful output targets”. It said this would allow third sector organisations to “remain mission-driven, rather than output-driven when they blend funding from multiple sources”.

Lisa Sanfilippo, head of measurement and evaluation at nef and co-author of the report, said commissioners and procurement officers often felt frustration when commissioning services from third sector organisations that they were unable to base decisions on what they knew worked on the ground.

“The language that commissioners have at the moment is more about outputs and price, when really what they’d like, and the organisations that they work with would all like, is to talk about the changes that are being made in people’s lives,” she said.

Ralph Michell, strategy and policy advocate at chief executives’ body acevo, welcomed the proposals for an outcomes indicator bank and said the project should “act as a spur to a genuine commitment to outcomes-based commissioning from funders”.