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How can small charities measure and articulate their social impact: A review of the literature with particular reference to UK charities

Chapter 1: Introduction

1.1 Background

There has been increasing emphasis in the past few years in the academic literature as well as the charity division itself on documenting and proving, and whenever conceivable, their social effect. Social effect documenting is a communication technique utilised to state the change implemented by a company and how the change was made. An impact document is simply an explanation of the shareholder activities impacting the change since it ought to also comprise an evaluation regarding how much difference has occurred. Financiers are extremely worried about the impact, both the effect made by the company they are supporting and the effect of their generosity. It has been proposed that approximately 9 out of 10 utilise information regarding the effect of candidates and grantees to decide on whether they should provide funds to the organisation they are supporting or not (Van Vliet et al., 2013). The growth of a social effect assessment is a technique that helps a company demonstrate its responsibility to shareholders including comprising financiers. The worth itself is innately emotional or non-objective and the idea of social worth may be much more thus, especially on the problem of how this could be assessed and selected as a monetary figure. There is no approved definition of ‘social effect’ or ‘social vale’. One of the greatest challenge charities face when measuring social effect are knowledge and ability. In the scholastic literature, there is an absence of significant examination or empirical study on effect with regards to relevance to and utilise by small and medium-sized charitable organisations (Harlock, 2013: p. 20). The focus of the literature has been more on bigger charitable organisations and voluntary companies or certain economic divisions, for example, medical care and social housing.

1.2 Problem statement

SMCs encounter a lot of difficulties when measuring social effects and worth. Research conducted in 2012 specified that 50 per cent of small charitable organisations did not measure social impact (Ogain et al., 2012). Some of the challenges comprise limited resources, the capacity of the organisation, the skill level that is needed, the related expense, in comparison to, the benefits, clash with the ethos of the association and problems in establishing a causal link to the results, particularly when different companies might contribute to the result (Cox and Hunter, 2016: p. 20). Significantly, SMCs perceive were to emphasise their measurement endeavour and how to keep it proportional to the amount of work they do. SMCs do display or exhibit their impact on society through contextual analyses and storyboards. Nonetheless, the academic literature does not view this qualitative method as having the same certainty as quantitative techniques that depend on financial values. SMCs find it difficult to show their worth under the rationale of effect appraisal and focus on quantitative evaluations (Gioacchino, 2019: p. 2) and there is increasing inequalities across charitable organisations. Problem has also been affirmed that this requirement to provide information about the impact, whether anticipated or substantial, could be detrimental in fulfilling the main objectives and targets of the company in providing for the necessities or requirements of beneficiaries and the users of the service. Moreover, the abilities to attempt quantitative effect measurements, especially SRoI, are exceptionally specialised and could be cost restrictive (Cox and Hunter, 2016)….