The benefits of impact reporting for NGOs

    CARE Australia’s development education coordinator in Liberia. CARE Australia Manager of Quality and Impact Andrew Rowell says a recent impact evaluation provided the organization a “better understanding” of its impact in Asia and areas for improvement. Photo by: ©Josh Estey / CARE

    Donors have been stepping up their game to measure the impact of every aid dollar spent. Should nongovernmental organizations start doing the same?

    CARE launched in November a report that tries to address a number of questions thrown against the organization. Donors are curious if the organization achieves value for money; supporters ask if donations reach those most in need; skeptics continue to wonder whether CARE is really making any difference.

    The report included data on project impact and outcomes from a number of Asian countries where CARE works. And, among other things, it provided CARE a “better understanding” of its impact in the region and areas for improvement, CARE Australia Manager of Quality and Impact Andrew Rowell writes for the Development PolicyBlog.

    Case studies in the report, for example, show that for every dollar invested in CARE’s programs, there’s between $7 and $42 social return on investment. In the case of a plantation community empowerment project in Sri Lanka, every dollar generated a return of approximately $42.60, benefiting communities, tea plantations and estates, and the government.

    But CARE, Rowell said, needs to “do a lot better” on a number of things, including improving its impact measurement processes. Rowell acknowledges, however, that the approach “may be unique among NGO reporting.” 

    Very few NGOs produce such reporting, although a number of donor policies are already encouraging them to do so. Australia, for one, aims to reward NGO programs that have demonstrated effectiveness and impact. Under its new Civil Society Engagement Framework released in June, the donor also aimed to develop an assessment methodology measuring an organization’s effectiveness that will figure in its funding decisions.

    “The idea of impact should get to the heart of our sector: why we do what we do, why it’s the best thing to do, and why people should trust us,” Katherine Smithson of the Charity Finance Group once said in a blog post for the Guardian.

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    About the author

    • Jenny Lei Ravelo

      Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.