Matt Stevenson-Dodd is the Chief Executive of Street League, UK’s leading sport for employment charity, and has been recently selected by The Guardian as one of the top charity CEO’s on social media. Matt is a guest speaker on the Clore6: Youth Sector Emerging Leaders Programme on 8 March.

The problem for charities with transparency is simple. Driven by a scarcity of funding, we feel compelled to tell ever more hard-hitting stories about the beneficiaries we serve rather than balancing this storytelling with hard facts about the actual impact we achieve (or don’t).

I believe we have reached the pinnacle of this story telling culture, epitomized by the collapse of Kids Company, who were seemingly built only on good stories with very few ‘facts’ to back them up.

This needs to change.

We need to balance good storytelling with hard facts, even if these hard facts don’t always tell a good story. If charities are truly focused on those in most need, then we have to accept that sometimes our work is really difficult and it doesn’t always get the results we want. We have a duty to tell this story, talking about what we do, as well as what we DON’T DO accurately and transparently.

Many charities think they are measuring their impact by reporting huge numbers of people they have ‘helped’. But what does ‘helped’ actually mean? Is it just saying hello to someone or does it mean truly making a change in that person’s life? This is where the culture of telling a good story has unfortunately taken over from transparent accurate impact reporting.

Let’s take a very measurable outcome, like getting someone a job. In many ways it is a binary ‘on or off’ outcome because that person will either get a job or they won’t, right? Well, yes to an extent, but unfortunately that is where many charities stop – they just tick the box and report that they have helped someone get outcome.

We don’t actually know anything about that person and whether they truly needed the help of the charity. What if the person who got the job was actually a university graduate with no socio-economic barriers the day before? Let’s say the charity helps them get a job, which is all good, but then they walk out of it the next day. In the current culture the box is still ticked, one job outcome recorded, regardless of whether they genuinely needed help and the longer-term impact.

Not good enough.

Outcomes are sometimes hard to measure, but not impossible. The softer the outcome (like improving someone’s self-esteem for example), the harder it is to measure. Even the easier to measure outcomes, like whether someone got a job, can also prove tricky – hence the need for more transparency and openness.

Let’s go back to our job outcome. To fully understand what is going on we need much more information to determine whether the charity is genuinely making a difference. We need to know whether the person we have helped needed it and what long-term change we actually made in their lives.

I am CEO of a charity called Street League – we are the UK’s leading Sport for Employment Charity. We have been fortunate enough to work with Impetus-PEF and Inspiring Scotland (the UK’s top Venture Philanthropy organisations) over the past seven years, who have pushed us hard to develop transparent impact measurement. We have been on a three-stage journey.

Pre-2010 we used to just measure ‘participation’ – the number of people who took part in our sessions. We stopped that and moved to an outcomes based model, very much like the one I outline above – ticking the box when we achieved a job or training outcome. That was better, but still a long way from the transparency we wanted.

Four years ago we introduced a new system which tracked the whole journey of the young person; from the moment we met them, right through to helping them stay in a job for six months or more. We examined where the young people were coming from, including the barriers they faced, and introduced a rigorous internal audit that required every outcome we achieved to be validated. Now, a job outcome is only valid once we have a photocopy of a first month’s pay slip or a job offer letter.

Last November we presented all of this information in our most transparent Annual Report to date which is available here. We have devoted the first section to talking about everything we didn’t get right, before we go on to talk about what we did get right. It has not been easy and we still have a way to go, but full data clarity has enabled us to throw a spotlight on our model, learn from our mistakes and change things so we can better serve our beneficiaries.

There have been many attempts to produce a unified measurement system for the charity sector. These virtuous attempts have usually ended in too higher a degree of complexity to make them workable. I believe there is a more straightforward and simple alternative.

All charities should agree to three high-level rules for reporting, which would kick start a revolution in transparency. At Street League we call these our ‘Three Golden Rules’:

• Never over-claim what you do
• All percentages must include absolute numbers
• All outcomes must be backed by auditable evidence
• If we all started with this, transparency will follow.

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Matt Stevenson-Dodd is a guest speaker on Clore6: Youth Sector Emerging Leaders Programme, where he will share his lessons on impact and the importance of transparency for good leadership.

If you are interested in hearing from inspiring speakers and experts in social sector leadership, check out our upcoming open Clore6 programme. The applications are open until 17 March 2017.

Richard Harries’s paper for Clore Social Leadership, Facing the Future, highlights the main challenges for sector leaders over the coming decades. Fiscal constraint, geo-political shocks and technological advances are changing the nature of social need, as communities tackle inequality and people live longer. At the same time state resources continue to shrink and the mantra doing more with less is stretched to breaking point.

When faced with these pressures many charity leaders will naturally ask: how are we going to find someone to pay for what we do in the future? However, to be able to respond effectively our sector needs to think more profoundly about business models, and not simply where replacement funding is coming from.

Many charities have had a hand to mouth existence. The job of raising money has not always been closely connected to the delivery of value. This disconnect between who pays and who benefits matters because when those who have been paying stop doing so, they are not the ones who immediately lose out.

Much has been made of the potential for social investment to help charities adapt to the changing financial reality. However, the hype about social investment has sometimes missed the point and the adaptation required is more fundamental than is often understood. Loans are not a substitutes for income which has been lost. Rather they are a tool that can help some charities earn more revenue in the future. In a model where you are trading, the link between who pays and who benefits is stronger; and this can help build resilience.

Therefore the question for leaders to ask is not ‘where is the money going to come from?’ but more profoundly, ‘what sort of business model is appropriate as we respond to these future challenges?’

One of our roles at Access is to design and fund capacity building programmes which aim to help charities make this sort of transition. We have consulted widely on what support is needed and the clear top two areas are around leadership and governance. (The others are impact management capabilities, finance and business modelling skills, marketing and improving the use of data.)

For executive leaders in the sector the challenge is often one of having the time to step away from the day to day and consider these questions in a supportive and stimulating environment. Similarly having the confidence to try something new, especially in an organisation with a long history of doing things the same way, can be daunting. Peer learning is one way these challenges can be addressed and is a key design principle for our programmes.

Engaging charity trustees in these questions is the next task. As Richard points out, there are nearly a million charity trustees in the UK, with an average age of 57. They come into their roles often passionate about the cause, but not necessarily with the skills and experience to recast the way a complex organisation operates. Furthermore, trustees are increasingly operating in a risk adverse environment. Negative headlines, declining public trust and an increasingly pro-active regulator are all factors which might encourage trustees to batten down the hatches. However in our sector risk works in two ways; and the consequences of inactivity can be just as bad as making mistakes.

Trustees need to be encouraged to embrace and manage risk as they help their executive leaders to look to the future and consider what business model is right for their charity. Once the business model is defined, the job of financing it will be much clearer; and there will be a good starting point to answer the answers which investors and funders will have.

Please share your views and comments below or on Twitter @CloreSocial. You can also follow Seb on @sebelsworth, and Access here @si_access.