In uncertain times, and with increasing pressures on resources and declining public trust, charities are ever more focusing on their effectiveness and the impact they are having. The decision-making process needs to be as informed as possible.

Benchmarking can be an invaluable tool in making better and more informed decisions. It can provide information on:

  • the performance and effectiveness of a charity,
  • how it compares to others in the same sector,
  • how it compares to those in different sectors – could it do something different from ‘the norm’ in its own sector?
  • whether changes are needed
  • whether more income needed
  • or whether costs need to be controlled

It can also provide a useful framework or source of reference for beneficiaries and stakeholders, allowing them to make comparisons and assess how well the charity is doing.

A strategic tool

Benchmarking should not be viewed as just a number-crunching, ratio-generating exercise. The outcomes of a benchmarking process help you to assess the state of your organisation, and therefore feed into your strategic planning. They can help with both short-term operational matters, as well as long-term aims and mission.

Risk awareness

Benchmarking may also highlight risks to your organisation or help to explain why you are suffering ‘pinch-points’. You will then be able to put plans in place to mitigate those risks as considered necessary.