Understandability and Transparency of the Financial Statements of ...

the world has got for its money. The World Health Organisation, has done some
evaluation, that shows some charities‟ programmes have actually hurt healthcare, but no
changes have been made. Philip Stevens, from the International Policy Network based
in England, spoke for many when he said:
The public health community has convinced the public that the only way to
improve poor health in developing countries is by throwing a ton of money at it
(Anonymous, 2009, p. A21).
The reason many charities give for not evaluating outcomes is that it is too hard to
measure them, a point which is considered next.
8.3.1.3 Difficulties in measuring outcomes
Hyndman (1991) considered that the reason many charities did not report their
outcomes was the difficulty in measuring these outcomes. More recently, this has been
supported by Lee & Fisher (2007) who found that outcome measurements were
difficult, particularly when the expected impact on beneficiaries is often influenced by
external environment factors which are outside the control of the charity.
The fact that financial reporting occurs annually presented more difficulties, as noted by
Aimers & Walker (2008), who found that it is difficult to demonstrate an immediate
impact from the services of many charities since the intended effects may not be
apparent for several years. Agyemang et al. (2009, p. 22) also found that the short term
reporting requirements of donors did not consider the slow local decision-making
processes of some beneficiary communities, who did not necessarily stick to reporting
deadlines.
Given the difficulties in measuring outcomes, charities tend to use those measures
which are easy to compile rather than the most appropriate measures, which limits the
success of outcome reporting in providing meaningful information (Agyemang et al.,
2009; Lee & Fisher, 2007). This further emphasises the need for outcome measurement
to be evaluated to ensure that it is the best form for measuring what difference the
charity makes in the lives of their beneficiaries.
Before leaving outcomes performance measurement and moving on to the reporting of
charities‟ financial viability, it is useful to look at the five reasons Sorkin (2009)
identified for charities not measuring, evaluating and reporting on their outcomes. These
are: (1) Ignorance of how to do it; (2) Fear of what they might discover; (3) Lack of
resources to do it; (4) Lack of commitment to doing it; and (5) Conscious resistance to
doing it (Sorkin, 2009). Even with all these difficulties, the consideration of whether
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