Lords Select Committee: Accountability and impact in charities

3 November 2016

The Lords Select Committee convened on the 18th of October to discuss accountability and impact in charities. Evidence was presented by experts in the field including Paul Streets OBE (Chief Executive of the Lloyds Bank Foundation); Gen Maitland Hudson (Head of Evaluation and Impact Assessment for the Power to Change Trust); and Dan Corry, Chief Executive of NPC.

Several themes emerged from discussions, but the most predominant was to not assume there is a perfect approach to impact analysis for charities. The quantitative results of social and economic benefits that funders may tend to look for can lead to a damaging focus, especially among smaller charities. Often it is the qualitative, small steps that indicate the greatest effect that a charity has had among its beneficiaries.

Some other vital points made during the hearing included to not just focus on the success stories of a charity, but also to demonstrate where they went wrong or could seek improvement. This constructs a realistic picture of an organisation willing to highlight and fix its shortcomings.

Trustees should be encouraged to have a greater role in the impact of their charity. Larger and more complex charities often assume that trustees need not be involved with impact analysis, however the hearing concluded that this is an essential part of improving strategy and efficiency.

The government’s shift from grants to contracts for charities is damaging the sector. Many of the criteria included in the contracts are unrealistic and don’t accommodate for the specific needs of the charity. Government grants allow charities the freedom to develop in a way they deem necessary. Government departments should better communicate with charities to improve the allocation of resources. Information sharing, such as the Justice Data Lab, will ultimately give charities more opportunities to analyse their impact and wider problems in society.

Recommendations for the future from the three witnesses are as follows:

• Dan Corry - The creation of an ‘annual reports culture’ for charities to encourage self-reflection
• Gen Maitland Hudson - For governments to not extend and facilitate the life of failing charities
• Paul Streets - The government should also reconsider their preference for contracts over grants for charities

PBE looks forward to extending its role to help charities achieve the above aims and recommendations.

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