Making charity effectiveness transparent: Building a stakeholder‐focussed framework of reporting

Date01 May 2018
Published date01 May 2018
DOIhttp://doi.org/10.1111/faam.12148
Received: 23 December 2015 Revised: 16 September 2016 Accepted: 11 October 2016
DOI: 10.1111/faam.12148
ORIGINAL ARTICLE
Making charity effectiveness transparent: Building
a stakeholder-focussed framework of reporting
Noel Hyndman Danielle McConville
Queen'sUniversity Belfast, Riddel Hall, Belfast,
NorthernIreland, UK
Correspondence
DanielleMcConville, Queen's University Belfast,
RiddelHall, Stranmillis Road, Belfast, Northern
IrelandBT9 5EE, UK.
Email:d.mcconville@qub.ac.uk
Abstract
Effectiveness in achievingmission is fundamental to evaluating char-
ity performance, and is of central concern to stakeholders who fund,
regulate and otherwise engage with such organisations. Exploring
the meaning of transparency in the context of stakeholder engage-
ment, and utilising previous research and authoritative sector dis-
cussion, this paper develops a novel framework of transparent,
stakeholder-focussed effectiveness reporting. It is contended that
such reporting can assist the charity sector in discharging account-
ability, gaining legitimacy and in sharpening mission-centred man-
agerial decision making. Then applying this to UK charities’ publicly
available communications, it highlights significant challenges and
weaknesses in current effectiveness reporting.
KEYWORDS
charity, effectiveness, not-for-profit, stakeholder,transparency
1INTRODUCTION
Inthe United Kingdom (UK) context, charities are a particular form of not-for-profit organisation (NFPO) defined in law.
They are facilitated through various legal and administrative frameworks by,for example, significant tax benefits and
(arguably) lighter-touch legal and regulatory frameworks. The UK charity sector comprises over 161,000 registered
general charities with an estimated income of £39.2 billion (National Council for Voluntary Organisations (NCVO),
2014).1In common with other NFPOs, charities have a mission unrelated to profit, for example: the relief of poverty,
or the advancement of education. Recent calls for a conceptual framework for NFPOs (Ryan, Mack, Tooley, & Irvine,
2014) emphasised the need to recognise this distinctive focus and to provide information on organisational mission
and success in achieving that mission. An important aspect of this is the measurement and reporting of effectiveness:
measuring what has been achieved and comparing this to mission-based objectivesand targets. Charities in particular,
and NFPOs in general, havebeen increasingly called upon to be more transparent about their effectiveness, especially
in the context of the increasing use of NFPOs to deliver services previously provided bythe public sector (Ryan et al.,
2014). Such calls have been particularly observedwith respect to the UK charity sector from central government (HM
Treasury,2014), sector interest groups (Inspiring Impact, 2013) and regulators (Charity Commission, 2004).
Calls for transparent reporting on effectiveness often highlight its potential usefulness to a range of internal
and external stakeholders, including large funders, charity managers and beneficiaries (Benjamin, 2012; Carnochan,
Financial Acc & Man. 2018;34:133–147. wileyonlinelibrary.com/journal/faam c
2018 John Wiley & Sons Ltd 133

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