Talking about results is based on an analysis of the annual reports, annual reviews, impact reports and websites of 20 of the top 100 UK fundraising charities, and concludes: “Charities in general are missing an opportunity – to communicate to potential supporters what they need and want to know”.

While 90% of the charities analysed were good at describing what they did – their outputs, only 41% communicated clearly what changes they achieved in people's lives – their outcomes.

“There is often a chasm between the sector’s rhetoric around impact and its reality. While it is undoubtedly true that awareness of the importance of impact and outcomes – measuring them and communicating them – is now high, our experience suggests that this has not yet translated into the practice of charities routinely measuring and communicating their impact,” says the report.

NPC argues that when surveyed, donors consistently say that the two most important factors in trusting charities are how the money is spent and what it achieves. “For ‘informed donors’, annual reports, annual reviews, impact reports and charity websites will be their first port of call to find out what they want to know. If charities are not communicating their impact in these materials, donors will look elsewhere for those that are,” it advises.

The organisation also believes that informed donors will become increasingly important to charities in the face of impending public spending cuts, and pressures on individual, foundation and corporate giving.

Tris Lumley, NPC head of strategy, adds: “If charities want to survive and thrive in these difficult times, being able to communicate what they achieve will be absolutely vital. Whether to review and improve the work they're doing or to appeal to donors, their reports need to be answering the same questions.”

However, despite this critical assessment, NPC believes that charities can quickly improve how they talk about results, and suggests how charities can improve their communication of impact, crystallised in five key questions:

• What is the problem we are trying to address?
• What do we do to address it?
• What are we achieving?
• How do we know what we are achieving?
• What are we learning, and how can we improve?

The findings of the report chime with some of the early emerging results of research being carried out by the Charity Finance Directors’ Group (CFDG) and CASS Business School. As with the NPC report, there are significant variances in the levels at which ‘impact’ is approached in evaluation and in annual reports. In particular, charities appear to be good at reporting on their outputs. However, very few are linking these outputs with the outcomes they are achieving for their beneficiaries and with sustainable impact.

CFDG policy manager Megan McInally says: “Whilst an encouraging proportion of CFDG members are collecting information on the impact of their services, there appears to be significant barriers associated with converting this information into meaningful representations of their outcomes in relation to the charity’s targets and mission statement. Although there are several examples of good practice, effectively presenting this information through reporting techniques is not widespread and needs to be explored further.

“The target audience for this type of information is growing and demand is increasing as funders and the general public want clear demonstration of impact from investment,” she concludes.

The CFDG/Cass research working group is due to report findings in the next few months.

NPC perspectives: Talking about results is available for free from the NPC website.