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ACCA Strategic Professional · Advanced Performance Management · Performance optimisation in specific contexts

Harbour Light, a charity supporting homeless people, reports that it spent 92% of donations on programme activities. The trustees want to judge whether the charity is actually helping people into stable housing. Which approach best addresses this aim?

Measuring outcomes, such as clients still in stable housing a year after support, best shows whether the charity achieves its mission. Outputs like meals provided or spending ratios show activity and inputs, not whether lives actually improved.

  1. ACompare the percentage spent on programmes with that of other charities only
  2. BMeasure outcomes, such as the number of clients still in stable housing twelve months after support endsCorrect
  3. CCount the number of meals and beds provided each month
  4. DTrack the growth in donation income year on year

Explanation

Not-for-profit performance is judged on effectiveness, which means outcomes against the mission. Stable housing after twelve months measures the change achieved. Meals and beds are outputs, and a high programme spend ratio is an input measure that says nothing about results.

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