Tris Lumley

Funders today – whether established grantmaking trusts, family foundations or individual philanthropists – are keen to explore how they can offer charities more than money. Financial help is clearly central to grantmaking, but it’s often by developing relationships with charities, then working out how they can use their skills, networks and other resources to help them, that funders create the greatest sense of partnership and mutual reward. Venture philanthropy is one way donors can take this more-than-money approach. ‘Funding plus’ is another. With a ‘funding plus’ approach, non-financial support is given alongside money – for example advice, consultancy, training or mentoring. It’s an approach that’s generating a lot of interest among foundations at the moment.

But there are actually many aspects of a funder’s core grantmaking practice that can have a big impact on the organisations they help – areas where good practice can help charities to improve and learn about their work. Reporting is one such area.

So a funder’s attitude to reporting can actually be a key part of an effective ‘funding plus’ approach. If grantmakers can align their reporting requirements with what the charities they support need to know to learn from and improve their work, they can have a greater impact whilst also streamlining their own processes.

The Diana, Princess of Wales Memorial Fund, for example, decided to try to focus their reporting framework on generating as much learning as possible. That meant they made their compliance reporting as simple as possible, and let the learning take whatever form was best – from reports to meetings. This meant the fund’s board spent less time reviewing reports from those they had funded, and more time working out what they were learning. In turn, the charities they helped spent less time churning out reports simply to comply with requirements.

On 11 October, NPC, in partnership with a broad coalition from across the charity sector, launched the Principles of Good Impact Reporting. These principles primarily aim to help charities structure their annual reports and external communications to tell a clear and compelling story about the change they seek to bring about in the world, and their progress towards that change. But as well as this core purpose, adopting these guidelines could encourage funders to harmonise their reporting requirements, and make them reflect the things charities themselves need to focus on to improve their work.

From my experience of talking to grantmakers about their reporting, we might be pushing on an open door by encouraging them to review their reporting requirements. Many funders tell me they don’t think they use the information they collect, and certainly not well enough to justify the burden these requirements place on charities. And many funders aren’t sure that they’ve got the right balance between reporting to ensure compliance (ie that the grant is being spent as it was intended) and learning.

So here’s my suggestion to trusts, foundations, and philanthropists – take a look at the Principles of Good Impact Reporting and see whether you could integrate them into your approach. Could you structure your application forms and processes around them? Could you incorporate them into your reporting requirements? If charities are already reporting in line with these principles in their annual reports, could you accept those in place of more bespoke reporting? Could you meet with funders operating in the same fields as you to see if you might agree on common reporting guidelines building on these universal principles?

The principles aren’t complex, or particularly novel. They aim for simplicity, focusing on what’s really important to find out how well a charity is achieving its mission. They lay out how charities should report on their work, and what they should report – the problem they’re trying to address; their aims and objectives; what they’re doing to achieve these; what they’re actually achieving; and what they’re learning

My personal hope is that in future charities will routinely structure their reporting along the lines set out in the principles, and that all types of funders will follow this structure when they seek information. If this can be achieved, funders and charities will be focusing on the same key information in their internal and external reporting. And charities’ boards will be more focused on managing their organisations against their missions.

Tris Lumley is head of development for New Philanthropy Capital