Open and trusting reporting

Accountability: ‘What have you done with this money?’

This first level of reporting is concerned with compliance, providing assurance to trustees that a foundation’s resources are being used responsibly and in line with the terms of the grant. If funders start from a position of confidence in their own application and assessment processes, and in the integrity and skills of the charities they are supporting, the responsibilities of good stewardship can be exercised very lightly. Funders are not auditors. And the trustees of the charities they support have their own duties of responsible management under charity law.

Impact: ‘What has been achieved?’

Everyone cares about making a difference. But foundations are far from uniform in their understanding of what ‘impact’ looks like, whose impact they are judging, and what they want to know about it. Some are concerned with tangible outputs – the number of activities provided, the number of people reached and so on. Some want to understand direct outcomes from the work – the short-term changes delivered or contributed to. Others are concerned with impact in its formal sense – the progress that is being made towards longer-term systemic and structural change (of which the work they are supporting is usually a very small part). Each makes different demands on funded organisations and calls for different behaviours from funders in agreeing realistic and meaningful reporting agendas with them.

Learning: ‘What can you tell us that will help us to do a better job?’

A commitment to more flexible, lighter-touch reporting does not mean Open and Trusting funders are giving up their responsibility to make purposeful, intelligence-informed decisions about strategy and practice. But it does mean they are not ‘pushing down the responsibility for “Are we doing a good job?” to the people we are funding’. Rather, they are taking responsibility for thinking deeply about the critical questions that will help them to make informed judgements about how to improve their contribution to the complex ecosystem they inhabit.

A grant reporting system designed primarily to hold individual charities to account for what they have done is unlikely to make much contribution to strategic questions for a foundation about ‘so what’ and ‘what next?’. Social change is complex and uncertain – we are all ‘swimming in murky waters’. Foundations become a stronger partner in this process by respecting the expertise and intelligence of the organisations they support, rather than setting and imposing rigid agendas. And by ‘thinking out loud’ and sharing what they have learned, they give value back to the organisations they support and the wider field.

1. Reduce the collective cost of reporting

Charities have many funders. Their different demands and requirements are onerous and too often force charities to focus on ‘what the funder wants’ at the expense of ‘what our organisation needs’. It makes a big difference when funders take account of this wider context in determining their own reporting needs.

2. Respect the demands on staff and service users

Heavy reliance on project funding means that charity monitoring and evaluation systems have to speak to many different funder targets and outcomes. This makes them cumbersome for operational staff and volunteers, and frustrating for beneficiaries, who often feel ‘assessed to death’. A bigger shift to funders looking at the overall performance of an organisation, not just their bit of the picture, would have huge benefits.

3. Be clearer and more transparent

Charities need funders to be upfront about what they expect from the work and how they will make judgements about what they fund. They need to understand when funders are monitoring performance and when they are interested in learning about challenges and progress. And they want to know what funders do with their reports and get meaningful feedback. Without this clear framework, reporting is ‘a leap of faith’.

4. Pay attention to the funding relationship

Charities appreciate the opportunity to build relationships with funders. It helps ‘to know the person on the other side’, and many find conversations and visits more satisfying than written reports. But relationships with funders are complex and framed by power differentials. And time is tight. Clarity about the nature and limits of the relationship a funder is offering enables charities to make informed judgements about how best to manage it.

5. Be more flexible about how and when reports are made

Funders can reduce inefficiencies simply by tailoring their reporting dates with charities’ own cycles. But a greater willingness to share control is also needed. Particularly when communicating progress and impact, charities can feel constrained by traditional reporting methods and by having to translate their activities, outcomes or the experience of beneficiaries into ‘funder language’. Having more choice about how and when to report adds value to charities, rather than simply taking up time.