Made to measure

Posted on 01 Jul 2025

By David Crosbie

Measurement

If we want to provide more productive and effective services across the charity and not-for-profit sector, we will need to invest in better measurement, writes Community Council for Australia CEO David Crosbie.

With the productivity agenda becoming more dominant in national policy, it’s even more important to focus on the question of effectiveness and value across the charity and not-for-profit sector.

The reality is that many organisations don’t measure what matters, and neither do our funders, including governments.

Most of the funding for the charity and NFP sector is driven by a listing of funded activities which are measured largely in terms of outputs: numbers of services provided, engagement of "target communities", participation in events, numbers of clients, and other activities.

Often, it’s the expenditure on each activity that is the main subject of reporting rather than what was achieved.

The move towards more informative outcome measurement has been slow, partly because measures of outcomes are more expensive, more time consuming, and require a higher level of skill and understanding if they are to provide valid comparable data that’s both attributable and meaningful.

Outcomes across our sector are usually about delivering changes in areas including improvements in health, education, employment, housing and creative realisation, or an increase in community consensus and connection, cultural understanding and resilience.

Attributing changes in individuals and communities to specific activities and interventions is not easy. Often there is a level of complexity associated with various systemic and individual changes, and the relatively short-term nature of many funded programs and activities compounds the difficulty of establishing reliable attributions.

The Productivity Commission's (PC's) report on the sector almost 15 years ago argued for much greater investment in measurement and suggested that some of the most significant achievements of the charity and NFP sector were in the impact of programs and services beyond the measurable outcomes.

The PC argued that even relatively short-term programs in areas such as health and education could sometimes deliver longer-term impacts such as building community wellbeing, trust, safety, connection to others, engagement in meaningful activity, finding voice and developing a stronger sense of self. The PC prioritised the need for the sector to better measure outcomes and impacts as a key factor in improving productivity.

"The bottom line is that if we want to provide more productive and effective services across our sector, we will need to invest in better measurement."

Unfortunately, recommended actions to build stronger knowledge systems to support the productivity of the charity and NFP sector have not been implemented. The PC's recommendations said:

“An Information Development Plan should be developed by the ABS, in consultation with key stakeholders, to improve measurement of the sector and monitor changes."

An evaluation clearinghouse and advisory services, initially focused on government-funded community service effectiveness, should be established. The Centre for Community Effectiveness would maintain a portal for lodging and disseminating evaluations, including consideration of their quality, provide training materials on good evaluation practice, and support the undertaking of meta-analysis of the evaluations by relevant experts.

Initiative 17 of the Not-for-profit Sector Blueprint addresses the issue in a different way, arguing for increased diffusion of knowledge from socially innovative initiatives.

Community Council for Australia CEO David Crosbie.

Again, the problem with this kind of recommended action is that no resources are allocated to the initiative and there is no clear vehicle for implementation. It’s also a relatively narrow focus on social innovation given many of the most effective charity and NFP programs are not necessarily innovative.

In fact, some of the most effective and valuable sector programs and services are built on years of practised experience. What would be innovative is to evaluate these programs and services in ways that demonstrate their real value beyond short-term programmatic delivery.

There is scope to improve the productivity of Australia’s charity and NFP sector, but not without some strategic up-front investment. We know many of our systems (prisons, for example) are not productive if we actually measure real outcomes (crime reduction).

A business faced with the potential to improve capacity and productivity by buying a new machine or other capability can borrow (debt finance) or raise money from shares (equity funding), particularly if it knows the increased capacity will mean higher profits.

No such financing option exists for charities. Providing more productive services that deliver better outcomes and impact doesn’t necessarily generate any additional income. Who’s going to invest in better models of service delivery in our sector?

Even if government and philanthropists do agree to fund better services, on what basis would the additional payments be made if there are no valid and comparable measures of outcomes and impacts?

The Productivity Commission knew – it’s why measurement was such a prominent part of its report into our sector. The bottom line is that if we want to provide more productive and effective services across our sector, we will need to invest in better measurement.

David Crosbie has been CEO of the Community Council for Australia for the past decade and has spent more than a quarter of a century leading significant not-for-profit organisations, including the Mental Health Council of Australia, the Alcohol and Other Drugs Council of Australia, and Odyssey House Victoria.

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