Den här artikeln är ett utdrag ur Giva Sveriges trendrapport 2022.
Donors and the public increasingly demand that fundraising organisations assess and demonstrate how their activities ”impact” on big societal problems such as poverty, climate change, and inequality. As a result, many fundraising organisations now measure their impact, using techniques such as Social Return on Investment (SROI) analysis, and disclose the results on their websites, in dedicated impact reports, or as part of their annual reports. But is impact just a buzzword?
An important sounding, but broad and ambiguous, “thing” that is measured solely to appease funders and to impress the public? Or has impact measurement and reporting the potential to assist fundraising organisations by stimulating learning? The limited academic research in this area tells us that impact is often ill-defined and poorly understood, which can lead to confusion when managers within fundraising organisations attempt to measure and report on their impact.
Furthermore, as impact reporting is often driven by funder accountability demands, it tends to focus on the direct, short-term, intended, and positive effects of activities. The potential for indirect, longer-term, unintended, and negative impacts is largely ignored. This can hamper learning and threaten mission achievement by encouraging fundraising organisations to concentrate on easy to achieve short-term goals. The key question then is: How can we ensure that impact measurement and reporting is considered a meaningful practice instead of just another bureaucratic burden?
The key question then is: How can we ensure that impact measurement and reporting is considered a meaningful practice instead of just another bureaucratic burden?
The literature on management control offers some insights that may help to address this question. According to David Otley, the general idea is that before thinking about measures, managers need to reflect on the key objectives of their organisation. For a fundraising organisation, this would involve a reflection on the mission and the intended impact of its core activities.
Based on the key objectives, plans and strategies need to be developed and management needs to reflect on how to assess and measure the impact that different strategies and plans have on the achievement of the key objectives. Several challenges are likely to emerge. Measures can only provide a “snippet” of reality and hence tend to be “incomplete”. This is particularly true for fundraising organisations that seek to address complex social problems. Measures thus need to be complemented with words and visuals to craft meaningful performance narratives. If we acknowledge both the strengths and limitations of measures and work with them mindfully and reflectively, then they can trigger constructive discussions.
Part of a mindful engagement with measures is to be aware of different time horizons. Creating (social) impact is hardly a short-term endeavour. It is hence important to reflect not only on how certain strategies are expected to contribute to the organisation’s key objectives but also when they can be reasonably expected to do so. Not
considering the time component can lead to tensions when it comes to:
(1) deciding on initiatives (long-term projects might look “worse” on paper than short-term projects) and
(2) evaluating performance (outcomes of a project or activity are not visible in the short-term raising misguided concerns).
Another important aspect is to distinguish between indicators that relate to impact as such and those that relate to impact drivers. Considering that impact might be difficult to measure, managers can use conceptual ideas about cause-and-effect to define measures that are linked to activities that they believe will drive impact. Those measures
hence allow managers to assess contributions to the organisation’s achievement of key objectives, even if the actual impact is difficult to measure.
Cause-effect relations can be seen as “hypotheses” that need to be tested and constantly refined over time. That is, if managers realise that ideas about what drives impact do not hold in real-life, they need to revise their “hypotheses”. In addition to the design of measures, managers need to reflect on how to use them. Here we can draw upon the work of Robert Simons who distinguishes between “diagnostic” and “interactive” use of measures.
In addition to the design of measures, managers need to reflect on how to use them.
When measures are used diagnostically, managers determine an expected level of performance and only intervene to help their subordinates to “get back on track” if significant deviations occur. An alternative approach is the interactive use of measures where managers frequently review and discuss measures that are closely
related to strategic uncertainties that could fundamentally challenge their strategies. Ongoing engagement with the measures enables managers to see if shifts in the organisation’s strategy are deemed necessary. Measures suited for interactive use thus do not only relate to bringing the organisation back on track but to changing the track.
Finally, an effective management control system requires wellfunctioning information flows that help organisations to monitor their achievements or to adjust targets, the underlying strategies or even the key objectives. Here we see the potential for integrating external and internal reporting practices. Organisations that internally work with measures that reflect the strategies and plans that are anticipated to contribute to achievements on the key objectives can also use those measures to communicate with their external stakeholders. Rather than using measures that only serve the purpose of external reporting, those measures might be perceived as more meaningful and to enable organisations to fulfil their mission.
Roel Boomsma, Senior Lecturer, Discipline of Accounting at The University of Sydney Business School
Lukas Goretzki, Associate Professor, Department of Accounting at Stockholm School of Economics