Why NFPs should fall in love with service performance reporting

Rachael Dean
insight featured image
Tier 1 and 2 charities are now required to include a statement of service performance in their annual report.

Service reporting is all about your non-financial performance – the data that showcases the most meaningful parts of what your entity does. The standard is designed to help everyone see the  fantastic work your charity is doing, and you might be surprised at the potential benefits of non-financial reporting. This service report tells all of your stakeholders:

  • why your charity exists – what is its purpose?
  • what you want to achieve – what are your organisation’s goals?
  • how will you achieve your goals – what actions will you take? 

Collecting the data can provide new insights

If you’re involved with a Tier 1 or Tier 2 charity, your first thought when it comes to service performance reporting might be, ‘More compliance, more work, no apparent benefit to us; put it at the bottom of the list’. But the process of collecting and reporting non-financial data can deliver considerable benefits for all Not for Profits (NFPs). 

It has the potential to uncover new opportunities for funding. For example, if your entity identifies ways it is building social capital, that could lead to new funding sources.

You can also identify areas of work which are either overperforming or underperforming, and make decisions based on that information. That might mean reducing resources for projects that aren’t providing a proportionate positive outcome for the communities you serve. Then, you could shift resources to areas that are overperforming: projects you might not have realised have such a significant impact, or work you’re doing that’s not being fully appreciated.

For example, we worked with an entity that carried out tree planting and other work to protect a habitat. Many of those involved later revisited the planting sites. The statement of service performance process alerted them to the value of this follow-up work. Capturing this type of data enables an assessment of the long-term impact on the environment and can be used to inform future planting and habitat control as well as provide good news stories.

Attracting more donors, volunteers, and funding 

Once you’re collecting service performance data, you can use it as a marketing tool. It can build your entity’s reputation for creating positive outcomes, and by telling these stories you can attract more people to support your cause. Reporting service performance data can also be a powerful way to publicly acknowledge and thank your volunteers and supporters. 

Take a look at the Fred Hollows Foundation annual report, or the Royal New Zealand Ballet. Both organisations use stories, data and imagery to give you an engaging overview of the excellent work they’re doing. It’s likely to lead to increased funding, donations and volunteers – three areas where all NFPs are always happy to see a boost. 

High-quality data leads to better decision-making 

Low-quality data – incomplete or inaccurate – can lead to incorrect conclusions, wasted time and resources, and cause bad decisions from governance level all the way through to frontline volunteers.

High-quality data is inherently useful for any organisation. It leads to better decision-making, better resource allocation, and spotting trends sooner rather than later. Good data needs to be fit for purpose: relevant, accurate, complete, reliable, and timely. For an audited statement of service performance, it also needs to be verifiable. Obtaining that high-quality data requires good systems to collect and collate it. But these systems don’t have to be expensive and time-consuming.

You might think you already have some good non-financial data and you’re already doing some performance reporting, so there is nothing you need to do. But for those now required to produce an audited statement of service performance, this means you will need to review the reporting you already do, where the information comes from and whether it can be verified. Reviews inevitably prompt discussions about your key objectives and how to:

  • improve the delivery of goods and/or services 
  • improve the data already being collected
  • improve the methods of data collections 
  • use this data for better internal reporting to both management and governance. 

Internal reporting is inevitably more detailed than what you report externally in your audited statement of service performance. 

Discussing and collaborating leads to better performance 

Consultation and collaboration lead to sharing information, diversity of thought, and ultimately better outcomes. We often work with entities to help them develop a roadmap to verifiable service performance reporting, and this typically involves workshops which pull together representatives from across the organisation.

These sessions give team members the opportunity to provide suggestions about how to improve aspects of their organisations. For example, someone might have some ideas about how to improve your donor payment portal that nobody else had ever thought about, because very few people within the entity ever looked at the online donor experience. We identified one situation in which people were wanting to join a NFP but the process was so onerous it was preventing people from doing so. Information like this leads to change, in the latter case immediate change, with noticeable results.

When you add up all the benefits of service performance reporting, it changes from a compliance headache to a powerful tool. As well as having the potential to enable you to do what you do even better, it gives you another public opportunity to share your story and journey towards delivering on your organisation’s vision.