Charities are under increasing pressure to demonstrate tangible impact but, in her study funded by Marshall’s small grant programme, Dr Julia Morley finds these cold and business-like descriptions of charitable activities can have a detrimental effect on worker motivation. In this blog, she shares her findings on the true effect of impact reporting on staff identity at UK social enterprises and charities – and what we should do about it.

Advertisers know that an emotional story sells. Charity fundraisers know it too. A photo of a child’s face or a heartfelt, personal story captures our attention in a way that an explanation of organisational effectiveness never would, no matter how rigorous.  But in the world of charity fundraising we are seeing an increasing demand from funders, such as foundations and social investors, for just these types of factual reports. Borrowing from the private sector mind-set, these funders want to see charities demonstrate their effectiveness by reporting their ‘social impact’.  Social impact is a measure of the success of a charity in achieving its objective of delivering long term benefits to society and is reported in quantitative or financial terms.

The demands for social impact reporting make sense. Most of us would agree that charities should ensure that resources are allocated in a way that will make the greatest positive difference in the world. But what if the way charities measure and report their social impact affects the motivation of the people who make that difference happen? My study into the effect of social impact reporting on the motivation of frontline charity workers investigates this issue and its potential implications for human resource management at charities.

Charity workers who deal with tough social issues such as homelessness, gang culture and young offenders have seen it all: despair, social exclusion, addiction, hopelessness and sometimes even violence. These workers are angelic in what they do. They selflessly help others and quietly work to make society better, while asking for very little in return. So what keeps them going? I interviewed 55 staff at charities, most of whom were tasked with delivering frontline services, to find out what motivates them – and what doesn’t.  My objective was to ascertain which day-to-day aspects of the job make staff happy to come into work each day and make them proud of what they do.

So what did I find?

Caseworkers told me that their experiences working with troubled and marginalized, individuals can, as we might expect, be demanding, stressful and sometimes depressing. Yet even when speaking about these difficulties, they exuded professionalism, and perhaps more surprisingly, great enthusiasm for their work. Some described their work as a calling. They acknowledged the challenges they face, but told me that they felt immense satisfaction when they truly connect with an individual who has been abandoned by society, how their day is brightened by their one-to-one interactions, and the immense pride they feel when they see the impact they have made on a person’s well-being. Charity workers have chosen this line of work precisely because they want to connect with individuals and make a difference to their lives.

All the caseworkers agreed that social impact reporting is important in helping to attract funding which ensures that they can continue to do good work.  And they could also see the benefits of social impact reporting in helping to direct resources to where they do the most good. They are after all, motivated to do good, so it will come as no surprise that they also care about doing the most good. Nevertheless, many interviewees also acknowledged some important problems associated with impact measurement and reporting.  These include its cost, the potential crowding-out of their time with clients, and the questionable reliability of the measures themselves.

An unexpected finding to come out of the interviews was that some staff find the actual reports of the charity’s ‘success’ to be off-putting if those reports focus exclusively on aggregate statistics and monetized success measures. This is because the caseworkers’ conception of ‘impact’ is based on activities such as the development of a one-to-one relationship with an individual, the process of  improving a client’s emotional well-being or the building of a trusting relationship – not on abstract statistics or financialized benefits such as savings to the taxpayer. For caseworkers, it’s all about the individual.

A significant proportion of the frontline staff told me that impact reports which distilled the complexities of their work with clients into a mere quantitative summary failed to capture the essence of their job, the core of which is the nurturing of an emotional connection with an individual.  That is not to say that staff don’t want to generate impact – they certainly do! – but they don’t find impact reports that focus only on numbers motivating. Crucially, some caseworkers actually reported finding data-focused impact reports slightly demotivating. My research revealed time and time again that caseworkers, when presented with varied descriptions of what their charity did, engaged with the narratives about an individual’s journey and the role the charity played in that journey, but felt disengaged when presented with reports that consisted of abstract statistical reporting.  This is a significant issue given the growing pressure on charities to report impact in such abstract quantitative terms.

Why does the attitude of caseworkers to impact reporting matter?

It matters because the increasing focus on impact reporting may demotivate charity workers, the very people charged with delivering impact. As a result, managers at charities face a dilemma. On the one hand, the charity needs to raise funding which, given the lack of resources in the charity sector, increasingly means that they have to be able to demonstrate impact to potential and existing funders.  But on the other hand, the charity needs to ensure their staff remain motivated.  In a commercial business, a manager has a greater range of factors to put into play to motivate staff, such as pay and promotion. Yet these sorts of incentives are less likely to be effective in the charity sector. First, charity workers have generally chosen the job because of the intrinsic motivation it provides, not because of its financial rewards; no one works for a charity expecting to get rich. Second, promoting staff would tend to require them to take on greater managerial or administrative responsibilities, thereby reducing the amount of time they spend working with individuals which is, after all, what they tend to find most rewarding.

All of this means that managers in charities face a devilishly difficult task. They must respond to funders’ demands for impact reporting while ensuring that they motivate frontline staff.  Managing these angels is not easy, even though they are sincere in their desire to make a difference. Their motivation relies heavily on the emotional component of their work, and so an excessive focus by managers on describing the success of the frontline workers’ endeavours using statistics and financial data may undermine motivation.

There is no easy solution to this problem, but as a first step, charities need to ensure that the human aspects of the job are not lost in the scramble to demonstrate impact.

Want to to delve deeper into topics like these? Consider the Marshall Institute and LSE Management’s Master’s Social Business and Entrepreneurship degree.


ABOUT THE AUTHOR

Julia Morley is a lecturer in the Department of Accounting. Her work focuses on the emergence of norms in performance measurement, such as ‘fair value accounting’ in corporate financial reporting and ‘social impact measurement’ in the social sector. She draws on work from sociology, psychology and philosophy to address a variety of topics. Recent research projects have addressed the group psychology of regulatory boards and the role of social impact bonds in shifting the discourse of the social sector.