Charity KPIs: What Should You Actually Measure?
Charities rarely struggle to find things they could measure, whether it be the number of people reached or progress against an intended outcome. The harder question is deciding which numbers are useful.
That is why well considered charity KPIs are important.
A good set of KPIs gives trustees and senior leaders a clearer view of whether the charity is moving in the right direction and which areas need a closer look.
This article covers what charity KPIs are, the areas worth measuring, and how to get from a long list of possibilities to a set of measures a board can actually use.
What Are Charity KPIs?
Charity KPIs are the small number of measures an organisation uses to judge whether it is delivering its strategy. Within a charity, KPIs may relate to financial resilience, fundraising, service delivery, impact or organisational capacity.
The important word here is “key”. A charity may collect hundreds of figures across its services and internal teams, but only a limited number will be important enough to guide decisions at leadership or trustee level. The right measures will vary according to the charity’s purpose, funding model and current priorities.
When deciding what to measure, it can help to distinguish between three levels of performance that are often reported together and all serve a different purpose:
Outputs - How much you did. Sessions run, meals served, people seen.
Outcomes - What changed for the people you did it for.
Impact - Whether that change lasted, and how much of it your charity is responsible for.
Outputs can show whether delivery is on track, while outcomes provide evidence of whether that activity is helping. Impact usually takes longer to understand and may be influenced by factors outside the charity’s control.
KPIs can also provide useful evidence for wider charity reporting. Registered charities in England and Wales must prepare a trustees’ annual report explaining the charity’s work, finances and public benefit. Charities preparing accruals accounts must also follow the applicable Charities SORP, which includes requirements around reporting achievements and performance.
Depending on the charity’s size and reporting requirements, the report may also need to cover its main activities, achievements and performance during the year – including performance against key performance indicators.
What Should a Charity Measure?
For most organisations, the final selection of KPIs will draw from four broad areas: financial health and fundraising, service delivery and demand, outcomes and impact, and organisational capacity.
The weight given to each area will vary considerably from one charity to another. The starting point should therefore be the charity’s goals. Before choosing individual KPIs, leadership teams and trustees need to be clear about what the organisation is trying to achieve and what evidence would show whether progress is being made.
Financial Health and Fundraising
Financial KPIs should inform understanding of the charity’s current position and how secure that position is likely to remain.
Possible measures include:
Income and expenditure against budget
Free reserves against planned expenditure
Restricted and unrestricted income as a proportion of the total
Reliance on the largest funder or income source
The value, stage and expected decision dates of live funding opportunities
These figures need to be read in the context of the charity’s own funding model and current priorities.
For instance, a charity may have achieved a healthy year of growth, yet still be exposed if a large proportion of its income comes from one funder. Tracking that dependency gives the board time to consider whether greater diversification is needed.
Fundraising measures should also reflect future activity. Income already secured is important, although it is largely historical. A pipeline measure can show the potential value of live opportunities, how far they have progressed and when decisions are expected.
Service Delivery and Demand
Service delivery measures show whether planned work is taking place and whether the charity is meeting the level of need it expected.
Depending on the charity, useful measures might include:
Referrals received and accepted
Waiting times before support begins
Service capacity being used
Planned activity completed
Programme completion or drop-out rates
Demand that could not be met
The number of people reached is often included in charity reporting. It can be valuable, particularly when funders have agreed activity targets. However, reach needs a clear definition. Teams should know whether they are counting individual people, attendances, households or interactions.
It also needs context.
An increase in beneficiary numbers could show that a service is reaching more people. It could equally indicate rising demand that the charity does not have the capacity to meet properly. Looking at waiting lists, response times or service completion may reveal a different part of the picture.
Outcomes and Impact
These are the measures that describe what changed for the people the charity supports. They are the hardest to build, the most valuable once built, and the area on which the SORP’s expectations now bear most directly.
As such, outcome measures should directly connect to the change described in the charity’s strategy. A mentoring programme, for instance, may track attendance because sustained participation is important. It might also look at changes in confidence, educational engagement or employment readiness, depending on what the programme is designed to achieve.
Measures might include:
The proportion of participants reaching an agreed outcome
Movement against a baseline recorded when support began
Service-user feedback
Progress sustained after the programme has ended
Milestones that show movement towards a longer-term result
Timescales differ across these measures, and boards should expect that. Delivery indicators show whether this quarter is on track. The outcomes that justify the charity's existence may take years to appear, and reporting cycles need to accommodate both rather than forcing the second into the shape of the first.
People and Organisational Capacity
A charity’s ability to deliver its KPIs depends largely on the people doing the work. This is especially important for charity models that rely on unpaid volunteer support.
These figures should be handled thoughtfully. A turnover percentage on its own says very little about the reasons people left or whether the rate is unusual for that organisation.
Capacity measures could include:
Long-standing vacancies in critical roles
Staff or volunteer retention
Sickness absence trends
Use of temporary or interim resource
Caseloads or workload against agreed levels
Mandatory training or supervision completed
Volunteer retention deserves its own line where a charity depends on unpaid support. Volunteer numbers can hold steady while the experienced people leave and are replaced by new starters, and a headcount figure will show that as stability right up until the point a service falls over.
The value of measuring capacity alongside everything else is that it catches pressure the other numbers hide. A growing funding pipeline looks unambiguously good on a board dashboard. It also generates work - more bids to write, and, if they land, contracts to mobilise and staff to recruit. A charity with one part-time fundraiser and no delivery headroom can be winning more and coping less, and nothing in the income reporting will say so.
How Do You Choose the Right Charity KPIs?
When choosing specific KPIs to measure within a charity, the best starting point is to look back at the original strategy. Consider the priorities the organisation has committed to and ask what evidence would show whether progress is being made. This often produces a more useful set of measures than starting with a generic KPI template that could apply to any organisation.
For each potential measure, consider the following questions:
What strategic priority does this relate to?
Who needs the information?
Can the data be collected consistently?
How often could performance meaningfully change?
Who is responsible for responding to the result?
What decision might this measure influence?
You should also aim to match the measures to how the charity is funded. For instance:
Grant-reliant charities may need to pay close attention to pipeline coverage and conversion rates, particularly where income is dependent on a relatively small number of funding decisions.
Contract-delivery charities may need to monitor unit costs, utilisation and delivery against contracted volumes to understand whether services remain financially sustainable.
Charities built on voluntary income may place greater emphasis on donor retention, repeat giving and lifetime value, particularly where maintaining existing relationships is important to future income.
As for how many KPIs, aim for eight to twelve at board level. Charities reporting thirty KPIs to trustees do not have thirty priorities; they have a long unfocused list, and the effect is that trustees give equal weight to all of it or might even quietly disengage from it.
Using Charity KPIs to Support Better Decisions
The value of a KPI comes from what happens next.
With eight to twelve KPIs showing direction of travel against target and a short explanation of anything off track, trustees can concentrate on what needs attention. Board discussions become less about working through every figure and more about deciding what to do.
The same applies to funders and commissioners. What builds confidence is not a strong quarter reported in isolation, but evidence that the charity understood what the numbers were telling it and acted on the uncomfortable ones.
Most charities can see this for themselves. Finding the capacity to redesign reporting, while running services and still reporting on the old framework, is where it stalls, and the people closest to the current measures are rarely best placed to decide which to drop.
VMC Consulting helps charities review the data they already collect, identify the measures that matter and build reporting that reflects their strategy rather than a generic template. Our wider support covers data, measuring impact and evaluation, board reporting and income generation.
We hold ourselves to the same standard. Race Council Cymru outsource their income generation to us, and we have now secured over £700,000 on their behalf, a return of £32 for every £1 invested. Every client working with us beyond three months has a positive return.
That work is delivered on a rolling monthly contract at £21,600 a year. A full-time fundraiser costs more than that in salary alone, before recruitment, on-costs, and the management time that never appears in the business case.
For a clearer approach to performance reporting, speak to our expert team of charity consultants today.