Charity impact measurement and reporting: a practical guide

Impact measurement can help you understand what is working well, identify where resources could be used more effectively and determine whether your services are reaching the people who need them most. Impact reporting can also provide useful evidence when you communicate with donors and beneficiaries. For registered charities in England and Wales, the Charity Commission explains in its public benefit reporting guidance that reporting can also help charities demonstrate the value of their work when applying for grants or fundraising.

For charities that prepare accounts on an accruals basis, the SORP 2026 framework introduces changes to charity accounting and reporting, including detailed guidance on impact reporting.

Read our article below to explore why impact measurement matters, which metrics can provide meaningful insight and how to turn your findings into clear, credible reports. We have also created a downloadable template to help you begin recording your charity’s outcomes.

What is charity impact measurement?  

Charity impact measurement is the process of collecting and analysing evidence to understand the difference your organisation makes. It can help you move beyond measuring activities and outputs, such as the number of people attending an event, to consider outcomes and the longer-term impact of your charity’s activities.

For example, a community group offering digital skills workshops might measure:

• Inputs, such as funding, staff time, volunteer time and equipment
• Activities, such as the number of workshops delivered
• Outputs, such as the services provided and the number of people attending
• Outcomes, such as participants gaining qualifications, skills or confidence
• Longer-term impact, such as participants using their new skills to find work or access services independently

The exact measures will depend on your charity’s objectives and the people it supports. The New Philanthropy Capital (NPC) recommends developing a measurement framework around a clear understanding of what your charity is trying to achieve.

A simple charity impact measurement process

A straightforward measurement process could include the following steps:

1. Define the change you want to achieve
2. Identify the activities expected to contribute to that change
3. Choose a manageable number of outputs and outcomes
4. Decide how and when the evidence will be collected
5. Assign responsibility for collecting and reviewing the data
6. Analyse the findings and identify limitations
7. Use the findings to improve services and communicate your impact

Why measure your charity’s impact? 

Impact measurement is not simply a reporting exercise. When used effectively, the information you collect can help trustees, managers and staff make better-informed decisions.

Identify what works

Comparing activities with their outcomes can indicate which programmes are contributing most effectively to your intended results. You may find that one type of support is producing stronger outcomes than another, giving you useful evidence on where to focus attention.

Identify where resources may be better allocated 

Measurement can show which activities are achieving the strongest results and which may be using more resources than the outcomes they deliver. It can also identify areas where additional investment may improve outcomes.

However, this does not necessarily mean stopping a programme immediately, as looking at why results differ can help you understand what is working, what could be improved and where funding or services may need to change.

Understand who needs the most support

Breaking down data by factors such as age, location, circumstances or type of support received can help you identify whether some groups are experiencing different outcomes.

This may highlight gaps in your services or show where additional support could be valuable. It can also help to inform your fundraising strategy.

Strengthen funding applications 

Showing the outcomes of your charity’s work and explaining how funding has contributed to your charitable objectives can help demonstrate value to potential donors and strengthen grant applications.

Improve accountability and transparency

Clear impact reporting can help donors, funders, beneficiaries and other stakeholders understand what your charity does and the difference it makes. It can also demonstrate that your charity is managing funding responsibly to maximise value.

Which metrics can a charity measure?

Key performance indicators (KPIs) are measurable values that charities can use to assess progress towards specific objectives.

The KPIs you use may depend on your activities, but they could include:

• Reach: The number and demographics of the beneficiaries supported
• Engagement: Attendance, participation and repeat engagement
• Service delivery: The number of sessions, referrals or interventions
• Outcomes: Changes in wellbeing, circumstances, confidence or skills
• Fundraising: Donations received, donor retention or fundraising income
• Efficiency: The cost per beneficiary or outcome
• Satisfaction: Feedback from beneficiaries, volunteers or donors
• Longer-term impact: Changes sustained after support has ended

NPC’s guidance recommends considering different types of data and prioritising information that can help you understand and improve your work. It is typically more effective to focus on a manageable number of KPIs than to collect overwhelming amounts of data.

How to measure your charity’s impact

There is no single method for measuring impact that will work for every charity, but a combination of quantitative and qualitative data can help provide a broader view. Start by defining how you expect your activities to lead to certain outcomes and contribute to your intended impact, as this can help you decide what to measure.

The data you collect through fundraising platforms and insights from tools, such as Google Analytics and Outcomes Star, can help you to track progress and produce reports. NPC explains how a theory of change can also help you monitor and evaluate initiatives.

Where possible, establish a baseline before an activity begins. This gives you a starting point against which change can be assessed. You can then set realistic targets, while recognising that external circumstances may also influence the results.

Use quantitative data

Quantitative data provides you with measurable information, such as the number of beneficiaries supported, attendance rates, donations, volunteer hours or changes in assessment scores. Your existing financial, fundraising, membership and service delivery records may already provide some of this information.

Collect qualitative feedback

Interviews, surveys, testimonials, focus groups and case studies can provide context about beneficiaries’ experiences and help explain why an outcome occurred.

For example, survey responses might show that most participants felt more confident after a training programme, while interviews could help identify which elements contributed to that change.

When gathering qualitative data, ensure any collection and use of personal information complies with applicable data protection legislation. Seek appropriate professional guidance where necessary.

Compare results over time

A single set of results may not show whether performance is improving over time, but tracking the same KPIs over several months or years can help you identify trends. You may also want to compare outcomes between different programmes and beneficiary groups to gain further insights.

How to report your charity’s impact

You could report your impact through your trustees’ annual report, fundraising communications or website. Alternatively, you may choose to produce a separate impact report.

When preparing an impact report, consider including:

• Your objectives and the change you aim to achieve
• The activities you delivered
• Who benefited from your work
• Your most important KPIs
• The outcomes achieved
• Beneficiary feedback and case studies
• Any challenges or areas where results were below expectations
• What you have learned and how this will influence future activities

Where possible, explain the period covered by your data, how it was collected and whether any groups or responses are missing. This gives readers useful context and helps them understand the strength and limitations of your findings.

To help you start, our free charity impact measurement template includes a simple reporting framework that can help you record outcomes, capture beneficiary feedback and prepare impact reports for trustees, funders and supporters.

Download our free charity impact measurement template

Impact measurement is most useful when the information feeds back into decision-making. You can set regular review points to check whether your KPIs still reflect your objectives, whether the data remains reliable and whether the findings are prompting useful action. It may also be useful to ask beneficiaries and staff whether your measurement processes are capturing the changes that matter to them.

NPC notes that effective impact measurement requires organisations to invest time and develop a culture focused on learning and improvement.

Please note: Impact evidence does not always prove that an activity caused a particular change. Other services, personal circumstances or wider social and economic factors may also contribute. Where causation cannot be demonstrated, it may be more accurate to explain how your work contributed to an outcome.

Consider the risks associated with charity activities

Measuring impact can help you understand whether your charity is achieving its objectives, but you may also need to consider the operational, financial, governance and other risks associated with delivering those activities.

You may wish to review your wider approach to charity risk management alongside your impact measurement processes. Appropriate charity insurance may also form part of a wider approach to managing the financial consequences that might arise from risks that cannot be eliminated through other controls. The appropriateness of any insurance cover will depend on your charity's individual circumstances, activities and risk profile.

Frequently asked questions

What is the difference between impact measurement and impact reporting?

Impact measurement is the process of collecting and analysing evidence to understand the difference a charity’s work is making. Impact reporting is the process of communicating those findings to trustees, funders, donors, beneficiaries and other stakeholders.

What metrics should a charity measure?

The most useful KPIs will depend on your charity’s objectives and activities, and could include the number of beneficiaries supported, engagement levels, service delivery, changes in beneficiaries’ circumstances and fundraising performance. Focusing on a manageable number of meaningful KPIs can make it easier to use the findings to inform decisions.

How can a charity report its impact effectively?

An effective impact report can explain what the charity set out to achieve, the activities it delivered, who benefited and what changed as a result.

Can a small charity measure its impact? 

Yes, small charities can measure impact without complicated systems or large budgets. Starting with a small number of outcomes, collecting feedback from beneficiaries and reviewing basic performance data can provide valuable evidence of the difference your organisation is making. As your charity grows, you can adapt your measurement approach to reflect changing needs and objectives.

Discover more about charity insurance and visit our knowledge centre for more help and guidance.

Please note: This article provides guidance for information purposes only and is accurate at the time of production. It should not be relied upon wholly when making or taking important business decisions – always seek the services of an appropriately qualified professional. The views expressed by websites referred to are limited to those of the websites, and do not necessarily reflect the views of Markel Direct. Markel Direct is not affiliated with any of the brands, companies or websites mentioned in this article.