More must be done to measure the value of the charity sector in order to help government understand the role it can play in solving deep economic and social divides, a Charity Commission paper has said.
The report states that: ‘People have a general understanding of the impact of sectors like manufacturing on society: they create jobs, income and goods and services to buy. However, trying to gauge the impact on society, both collectively and individually, of the charitable sector is much more complex. Yet as politicians strive to define what constitutes a successful country it is essential for them to take a view about the importance of charities, not just in terms of what they deliver but more broadly their impact on social cohesion, individual wellbeing and civic engagement.’
‘The standard economic measures are incomplete as they fail to pick up many of the key impacts of charitable giving and receiving. The purpose of this paper is to explain the steps that are needed to measure the value of the charitable sector. Proper measurement is an important step that would allow the sector to deliver more benefit and to understand its value. Measurement must reflect what charity means in the eyes of the public and serve to maintain the distinctiveness of charities in our society.’
The paper gives five components for measuring the social impact of charities, over simply their economic output.
1. Direct value to the public who receive charitable services
2. Value to members of the public who volunteer for charities
3. The wider value to members of the public who donate to charities, beyond the value of the donation
4. The wider value to employees of charities, beyond salaries
5. The wider benefit to society through the broader role of charities, distinct from specific impacts on individuals.