Your impact report is a really important document. It gives you the opportunity as a charity to convey to donors, both current and prospective, what you do and how you make a difference.

It also gives you the opportunity to communicate in a way that is beneficial to you as a charity, to your beneficiaries and to your entire mission, and to encourage donors to get behind that.

We suggest that you use your impact report as a means to an end in developing a more symbiotic relationship with your supporters.

Here are six ideas for how to make that happen:

1.  Highlight the long-term vision of your charity 

In order to encourage your audience to get behind your organisation and your mission as a whole, it is really important to bring the stories that you tell and achievements that you list back to your original intentions as an organisation.

Doing this will help your audience to understand what you are trying to do, and the change you want to see, rather than fixating on specific programmes or interventions that you run and looking at them as immovable objects.

Instead, it might be more helpful to think of your impact reports as telling a long and consistent story about your work, and how you have evolved it over time, to achieve your mission.

2.  Emphasise the work of your team

In addition to clearly articulating your long term mission, another important component of your impact report might be to highlight the achievements and work of your team, or include the profiles of your executive.

Doing this can help to signal to your audience that you have a high-performing team who are working hard to further the mission of your charity and are an integral part of its success. By extension, they are worthy of support and trust from donors.

3.  Don’t be afraid to include what’s gone wrong

Understandably, charities are often very focused on trumpeting their accomplishments in impact reports, as opposed to what could have been better, for fear of putting donors off.

However, being more open about both failures and accomplishments can be a good way to build trust with donors. We all know that nothing goes well 100 percent of the time, so being honest about mistakes or failures and, most importantly, what you are doing to address those failures, will build confidence that you audit your performance and approach your work from the perspective of continuous improvement.

4.  Use your finances to convey your impact

When discussing your finances, it can be tempting to oversimplify. The traditional ‘how much of every £1 donated goes to programmes versus overheads’ is not necessarily helpful.

It is not helpful to you as a charity because it does not make the case for much needed overheads, and it is not helpful for your audience because it sets unrealistic standards for the costs of creating impact. Instead, it could be more helpful to calculate the cost-effectiveness of your different programmes, or your social return on investment. Both can give a far more comprehensive picture of either the cost of your intervention for the benefit it brings about, or the economic, social or environmental saving generated by a particular intervention.

In order to be able to effectively measure your social return on investment or cost-effectiveness, you first need to understand if your interventions are effective or not (otherwise the cost of it will be meaningless). We go into this in the following two sections.

5.  Do not focus on outputs, focus on outcomes

As a charity, one of your goals for impact reporting, and demonstrating your impact, should be to understand how your intervention leads to certain outcomes (an important step to understanding your long-term impact as a charity).

Outputs are generally measurable and the direct result of a programme. For example, how many books were distributed within a literacy programme. But they give us little or no indication of the benefit of those books – did they actual improve literacy rates? Only demonstrating your outcomes can do this.

Outcomes are the longer term changes that you see as a result of an output (e.g. reduced rates of disease contraction). If your outputs do not lead to outcomes, then your programme may not be working as intended.

Just because a programme like vaccine distribution makes sense theoretically, does not mean that it works in real world conditions. By measuring outcomes, you can get closer to understanding the extent to which the assumptions you have made about your programmes, and your theory of change, are correct. Here is a helpful guide to thinking about your theory of change.

Measuring outcomes can be difficult, and it might be helpful to work with an external organisation to help you to achieve this.

6.  Highlight the counterfactual of your work

The counterfactual, in other words what would have happened were it not for your programme or intervention, is the ultimate indication of the difference that your work makes.

Delivering a robust impact report to donors depends on having some sort of counterfactual assessment and, by encouraging your donors to think of your charity as a whole and supporting your mission, they may be willing to fund trials that help you to understand this information.

Much like outcomes, assessing a counterfactual is hard as it often involves measuring the performance of your programme against a control group (a subset of the population which in all respects are identical to your beneficiaries except that they did not receive the intervention).

External monitoring and evaluation organisations are best placed to assist you measure this, but this can be costly.

For those organisations delivering direct interventions, measuring your counterfactual might be more straightforward than those organisations working on longer term policy changes or research. Nevertheless, it is still possible to think about your counterfactual in these cases as well, particularly by looking at your track record of success in addressing the issues your organisation cares about, the influence you have amongst stakeholders compared to your peers, and the extent to which other changes or shifts in your focus area may have had implications on your work but which you did not cause.

Final thoughts

The bottom line of all of these recommendations is that not only can good impact reports help your donors understand the difference that your work makes, but also you and your team.

Good impact reports can be costly to produce in terms of the information that they need to contain, but equally, developing the right kind of partnerships with funders can facilitate the support you need to measure and understand your success.

At the end of the day, charities exist to serve their beneficiaries and so understanding the impact that you have on their lives should be something that all organisations prioritise.