An alternative approach was to measure social and environmental outcomes in a qualitative or multidimensional manner, as opposed to monetary units as in the approaches outlined above. This method was at the time called ‘goal accounting and reporting’. Organisations documented all the social and environmental objectives they had set for themselves, and kept a set of quantitative and qualitative indicators to measure their progress in attaining them. This type of accounting was used by a number of larger companies in Europe. It was first applied by Deutsche Shell in 1976 and later refined by Migros, the Swiss co-operative retailer, in the 1980s. In Germany, the Arbeitskreis Sozialbilanz (AKSP), with over 30 leading German companies, created reports that combined both financial measures and goal accounting and reporting. From the 1980s until the mid-1990s, interest in social reporting methods waned. This may be attributed to growing faith in self-regulating markets and the fall of real-existing socialism that added to the faith placed on capitalism.

Recent history
The tide turned again in the late 1990s when there was renewed attention to the excesses of private enterprise. New trends were the increasing internationalisation of the economy, which removed the work from any single national context and increased the range of stakeholders. The agenda also widened as environmental concerns became more prevalent. Both social and environmental concerns were united under the notion of sustainability that had gained momentum in the late 1980s. These concerns were translated into calls for more transparency and
accountability in the functioning of organisations, and consequently a renewed interest in methods of social and environmental reporting. The ideas and principles of social and environmental reporting had already largely been scoped in the 1970s, but now were applied on a larger scale and in a more rigid manner. In particular, the measurement of environmental impacts developed strongly, in part due to the much wider array of information produced and available. A lot of work was put into the creation of new indicators, such as the ecological footprint,6 that would
best display the relevant knowledge about the impact of a single organisation.

This historical situation also served as the background for the creation of the concept of TBL. The term was initially conceived by John Elkington in 1994, and more closely defined in his book Cannibals with forks: the triple bottom line of 21st century business. The title of Elkington’s book refers to a quote attributed to the Polish poet Stanislaw Lec: ‘Is it progress…if a cannibal uses a fork?’ Despite the sceptical tone of its title, the book is quite optimistic regarding the possibilities for reforming business using new reporting practices and management principles. The idea of TBL gathered a lot visibility particularly because companies such as Shell and BP, advised by Elkington’s company, Sustainability, made use of it. Also the World Business Council for Sustainable Development, a group of 160 international companies, endorsed the concept. A further key development was the stronger standardisation and institutionalisation of reporting standards to make real the idea of TBL. In this respect the Global Reporting Initiative (GRI) has been especially successful. GRI was initially formed by the US charity Coalition for Environmentally Responsible Economies (CERES) in 1997. It has since worked in close collaboration with UNEP and the UN Global Compact. Its development process is somewhat unique in that it is managed through a wide network that has representatives from all sectors of the economy and different geographical parts of the world. This process has ensured legitimacy and a wide mobilisation for its principles. Currently over a thousand organisations produce sustainability reports along GRI guidelines.

Why is TBL important for the third sector?
The third sector is a complex set of organisations of different legal forms and models, disparate sizes and purposes. In order for them to promote their mission and function, they need to make sure both that the benefits of their work are effectively communicated and that they are doing the very best they can with the resources and skills they have available. Due to small size and scarce resources, the additional workload required to implement TBL practices can sometimes be perceived as prohibitive. This potential barrier to TBL measurement and others will be explored later. Here we are concerned with the reasons why TBL measurement should be pursued by third sector organisations. Some of the key reasons are:  A comprehensive picture of impacts is needed to be both socially and environmentally responsible. Often third sector organisations work towards a single goal or vision, be it more socially or environmentally focused. In a context where inequality is increasing and our economic and living practices are clearly unsustainable, it is imperative that all of us are mindful of the impacts our activities have across a range of social and environmental outcomes. Third sector organisations need to make sure they balance their social and environmental impact when pursuing their primary aims. Producing TBL accounts can make trade-offs between the social, economic and environmental explicit. It may reveal cases where, for instance, large social gains come with too high of a price for the environment, or vice versa. There is increasing recognition in public policy that the third sector has a responsibility in respect of climate change issues, as was evidenced by government investment in the Every Action Counts initiative and the establishment of the Ministerial Taskforce on Climate Change, the Environment and Sustainable Development. Demonstrating and communicating benefits can increase funding and economic opportunities. Foundations, charitable trusts and other grant-giving bodies, as well as the Government, are starting to require third sector organisations to rigorously demonstrate the benefits they create with the funds they receive. While most commissioning decisions still focus on cost reductions and outputs, there are increasing calls to account for the value created by public services more thoroughly. The Treasury already subscribes to a broader concept of ‘value for money’ in commissioning. This idea was also repeated by the Audit Commission’s recent report on commissioning from the third sector. It strongly states: ‘Commissioners need to develop a better evidence base to demonstrate value for money.’ Third Sector Organisations taking up TBL reporting are therefore likely to do well in future bids for funding if these changes take hold. Furthermore, equally for charities as well as for social enterprises, staying true to the demand their beneficiaries have for ethical economic practices is crucial. If the organisations are able to show that they work according to high environmental and social standards, their products will have a chance of getting a premium price on the marketplace.

Selling Added Value is a course that helps social enterprises working in public services to win contracts. This is achieved by better demonstrating the social benefits that their work has for the buyer of their services. The course is taught by the Social Enterprise Support Centre in West Yorkshire. Selling Added Value uses elements from both SROI and Social Audit Network’s (SAN’s) social accounting methods. It allows the organisation to focus on the outcomes that are most relevant for their funder and turns them into financial figures. Through such a presentation it is possible to frame the benefits in a way that is relevant to those awarding the contracts. For instance, the organisations can show reductions in the use of public services or other departmental savings.  Measuring social and environmental impacts can help an organisation to manage its resources more effectively. Using TBL methods allows the organisation to see where the greatest benefits and harms it creates lie. Some methods also allow a differentiation between separate parts of an organisation’s operation. With such information, it becomes possible for the organisation to better manage its allocation of resources so that it can better work towards its goals and balance its impact across all three domains. It can see where the biggest improvements can be made and what types of investments are most valuable. In some cases these measurements can reveal win-win situations, where multiple bottom lines can be improved without sacrifice. This is true especially in the case of increases in environmental efficiency, which often translate into cost savings.  Where a TBL approach uses stakeholder engagement, it can
make an organisation more responsive and accountable. The preparing of TBL accounts and reports often draws on the perspective of parties outside the organisation. As such, it provides
an opportunity for checking the extent to which the organisation is meeting the needs and expectations of its primary beneficiaries and those of other key stakeholders.

Overview of TBL in the third sector
The literature survey conducted for this report shows that recent years have been a particularly active time in the development of TBL approaches that can be used by third sector. Most of the methods available have taken their current form in the past decade, although there is still debate about what is the best way to measure and report impact across the three domains and
whether there should even be such a standard. As a consequence, there is still a large diversity of tools with different foundations, emphases and goals. Some of them put more stress on the management of organisations while some are simply tools for evaluating or reporting. Most methods are committed to using a number of different indicators to measure the impact of the organisation, while a few try to use a single financial metric. One challenge for the sector is to come up with some shared agreement on what the acceptable practices for doing TBL are, where these may be at the level of principles or a specific methodology. There are some signs of institutionalisation and standardisation that could serve such a purpose. In the UK, SAN and The SROI Network have created a network of training and accreditation to support the use of their methods. The Office of the Third Sector, as well as the Third Sector Division of the Scottish Government are involved in standardising and disseminating the use of SROI.15,16 While significant strides have been made in the development of approaches and tools, without extensive primary research it is difficult to say how widespread practices of TBL measurement and reporting in the third sector currently are. Based on the sources available, the practices still seem to be
quite limited in range. Larger organisations, such as Oxfam and The Cooperative Group, have extended TBL practices that are close to those used by large corporations.With smaller organisations, the use of TBL seems to be sporadic. As calls for the accountability of third sector organisations are increasing, and different evaluation methods are being taken up –
especially by public authorities – we are likely to see a larger uptake in the future.

Main TBL methods in the third sector
This section provides an introduction to some of the main approaches being used in the third sector. For more in-depth descriptions of these tools, please consult nef’s (the new economics foundation’s) website: www.proveandimprove.org or CES’s (Charities Evaluation Service’s) report on monitoring and evaluation. Social return on investment (SROI) SROI is an outcomes-based measurement tool that helps organisations to understand and quantify the social, environmental and economic value they are creating. Developed from traditional cost-benefit analysis and social accounting, SROI is a participative approach that captures in monetised form the value of a wide range of outcomes, whether these already have a financial value or not. An SROI analysis produces a narrative of how an organisation creates and destroys value in the course of making change in the world, and a ratio that states how much social value (in £) is created for every £1 of investment. The SROI approach was brought to the UK by nef in 2002 and subsequently refined and tested with a range of organisations. nef has carried out more than 25 analyses, mostly of social enterprises and charities, and continues to be central to the roll-out and development of SROI in the UK.

In 2008, The SROI Network was formed to promote the use of the methodology in the UK. The network’s website hosts 22 case studies of the application of SROI.19 Of these studies, most were on the activities of nongovernmental organisations (NGOs) working on social issues, especially increasing employment, youth work and community arts projects. Three of the studies analysed the work of social enterprises. The most prevalent motivation for the production of these studies was the piloting of the method and testing its applicability. Some of the case studies were also produced to show the benefits of projects for tendering. One significant shortcoming of the application of SROI so far has been that the environmental domain has been given relatively little attention. Apart from a handful of exceptions, SROI analyses have focused on measuring the social implications of activities. The same criticism can be raised against the majority of work using the Social Accounting and Audit (SAA) methodology. As the principles of TBL advocate, the environmental impact of an organisation should be given equal weight in its assessment.

The Office of the Third Sector is presently working on standardising and facilitating SROI analysis on third sector organisations. A consortium of The SROI Network, New Philanthropy Capital, nef, CES and National Council of Voluntary Organisations is involved in the project. Case Study 1: Mid Devon Community Recycling and SROI Mid-Devon Community Recycling (MDCR) is a co-operatively owned social enterprise that works for efficient recycling while also taking the needs of the local community into account. It has come up with innovative ways to minimise the environmental burden of its service. For example, MDCR is converting trucks to use biodiesel from local cooking oil and is training drivers in safe and fuel-efficient driving. These measures have environmental benefits, but they also reduce the cost of service delivery. MDCR also takes care of its social bottom line through the way it organises its operations. It
provides work placements for 12 people with a learning difficulty. It also keeps money flowing around the local economy by buying and recruiting locally, including its middle and senior managers.

An SROI analysis of its activities showed the added value created by MDCR’s approach to service delivery. Using the level of activity before MDCR’s new service as a benchmark, the analysis found that every £1 of public money gave rise to £0.73 in extra savings. The additional value is made up of carbon savings from increased recycling, improved human capital, and the value of the work done by volunteers with learning difficulties. These additional benefits were created while the service provider simultaneously remained competitive in its pricing. Social Accounting and Audit SAA is a framework for monitoring and evaluating the social, environmental and economic impact of an organisation. It is promoted by SAN, which supplies guidelines, holds trainings and accreditations in its use and maintains a register of approved auditors in the UK. The accounting process begins with the identification of the mission, objectives and values of the organisation. The relevant stakeholders are also identified and consulted. The performance and impact within the listed priorities is measured based on quantitative and qualitative indicators. The compiled information is brought together in a report and lastly verified by an independent auditor. The motivation for the use of SAA was researched by Teresa Butler in her
dissertation for Sheffield Hallam University. The twofold benefits to the organisations were found to be first the effectiveness of SAA as a business improvement tool. Secondly, it helps to prove the impact of the activities when bidding for funding. The research also mapped the barriers for the adoption of SAA based on its case studies. The most important of these was a lack of staff time to invest in the task, followed by the complexity organising the accounting and the associated data management. The use of SAA was also surveyed in a report by John Pearce and Alan Kay from SAN, published in November 2008. It studied the extent of the use of SAA in the North East of England, Cumbria, Merseyside and Scotland. The report identified 70 social economy organisations within these areas that had done social accounting, out of which 52 had had their accounts audited. Significantly, only 17 of the organisations had kept accounts of their social and environmental impact continuously and audited them more than once.

The SAN website hosts a list of 80 organisations practicing SAA.20 As the list is already rather dated, the number of organisations using SAA is likely to be larger. About half of these are charities working on community services or development. Approximately 25 are social enterprises. The system is also employed by a small number of housing trusts, credit unions and co-operatives. The website lists 25 individuals that have been approved by the organisation to perform SAA audits. Case Study 2: Community Enterprise Unit Ltd and SAA The Community Enterprise Unit Ltd (CEU) is a social enterprise and worker cooperative based in Exeter. It offers business advice, training and support for organisations working for the social economy. It helps both start-ups and existing organisations to plan their business, select the right legal forms and measure their impact. One of its activities is to facilitate training in SAA. No wonder then that CEU uses the method also to scrutinise its own activities. The report states the four broad aims of the organisation, which are further divided into more detailed points. They include delivering high-quality advice, being considered a great place to work and being financially sustainable. Performance along these goals is measured through evaluation forms and online questionnaires. These questionnaires show, for instance, that 56 per cent of CUE’s clients found its service very good and a full 100 per cent found it at least satisfactory. The survey of staff revealed some concerns about insufficient capacity for work and the stress that resulted. These conclusions led to improvements in the form of a search for more income streams and
better team organisation. The report also reviews improvements in CEU’s environmental performance, noting that it has switched to local suppliers where possible, uses recycled paper, and shares car transportation when it can.

Global Reporting Initiative
The Global Reporting Initiative (GRI) is the most widely used system for social and environmental reporting worldwide, but is still predominantly a tool that is used in the corporate sector. The system consists of a set of principles on reporting and a comprehensive set of qualitative and quantitative indicators in the social, environmental and economic domain. For instance for environmental matters, GRI includes indicators on the use of materials, energy, water, and impacts on air pollution and biodiversity. The social impact is assessed by looking at labour practices, the realisation of human rights and relations to wider society. These are to be reported in relative or normalised terms, to allow comparison between different organisations. Furthermore, GRI sets out a number of principles that need to be adhered to when reporting. These include principles around materiality and timeliness, as well as the requirements for the inclusion of stakeholders. One crucial limitation of the GRI indicators is that they focus only on the operation of the organisation itself and its inputs. To properly assess the functioning of the organisation, it would be necessary to also include measures of the outcomes that result from the organisation’s work. Over a thousand organisations produce sustainability reports along GRI
guidelines. The Initiative’s website hosts a register of organisations that either claim to have been or have been audited to work in accord with the accounting system. The only British third sector organisations that come up on GRI’s list are Oxfam and The Co-operative Group.Case Study 3: Oxfam and GRI Oxfam is one of the largest British NGOs working on solutions to poverty and social injustice. It was founded in 1942 as the Oxford Committee for Famine Relief, originally to persuade the UK Government to allow food relief to the blockaded Greece. It has since grown to a network of 13 organisations working in more than 100 countries. Oxfam produces an annual report that includes the typical facts that are expected from most organisations, outlining its objectives and activities, as well as its financial accounts. The appendix, however, also includes information on its ethical purchasing policy, greenhouse gases and other pollution emitted, and a breakdown of the characteristics of staff and volunteers. To comply with GRI, Oxfam also shows which of the recommended indicators it is using and where in its accounts the information is available. The regular reports are supplemented by a table where it goes through the indicator set, referring to page numbers in its actual reports where the data is
presented. This is a rather monotonous list, but allows someone accustomed to the standard to quickly find a particular piece of knowledge, or to check how comprehensive the reports are.

AA1000 AS
AA1000 AS is a quality framework that aims to ensure that social and environmental reporting is done in a transparent and responsive manner. It is a private voluntary standard launched by the Institute of Social and Ethical Accountability in 1999. It is still governed and developed by the Institute, now under the name of AccountAbility. AA1000 AS does not prescribe any particular indicators or measures, but rather assesses the process through which these are applied. It includes guidelines from the inclusion of stakeholders to the design of the accounting
system and the provision of information. The quality of accounting is further assessed using 12 quality principles, the most important of which are materiality, completeness and responsiveness. Materiality requires that the organisation includes all the information that is relevant for the stakeholders to make informed judgements about it. Completeness refers to the need of the organisation to identify the right tools for assessment and provide sufficient resources for the execution of the report, i.e. ‘measuring the right things in the right way’. Responsiveness, in turn, asks the organisation to show that it has suitably responded to the concerns of the stakeholders. A register of AA1000 AS users is held by the CorporateRegister web service.22 The only British third sector organisations using the standard present in the database are AccountAbility, the Co-operative Financial Services, the Co-operative Insurance Society, and Traidcraft.
Co-operative Environmental and Social Performance Indicators The Co-operative Environmental and Social Performance Indicators (CESPIs) are a set of indicators to monitor and manage the performance of co-operatives on social and environmental issues. The 10 indicators include things most relevant to co-operative operations, such as member involvement, staff profile and recycling.

The indicators were developed and are being used by Co-operativesUK, an organisation that aims to aid the work of co-operative enterprises in the UK. Co-operativesUK has 4700 members that are asked to fill out and return a CESPI assessment annually. The results of the reporting are not made available to the wider public. Co-operativesUK uses measurements of the
indicators to promote improvements within its member organisations, for instance through the competitive Carbon Challenge that aims for reductions in carbon footprints.

Social Enterprise Balanced Scorecard
The Balanced Scorecard is a management tool that measures and gives feedback based on factors that will indirectly allow the organisation to reach its goals. The organisation first maps out its objectives, which may include social and environmental alongside economic aims. It then connects these with key drivers that indirectly contribute to reaching those objectives. These drivers are then routinely monitored and used to assess the performance of different parts of the organisation. The original Balanced Scorecard was modified by Social Enterprise London to fit the needs of social entrepreneurship. Another version of the Balanced Scorecard in simplified form is the Social Firm Performance Dashboard developed by Social Firms. No systematic review of the use of Balanced Scorecard in the third sector was available. A number of social enterprises and some co-operatives make use of the system, including the Oxford Swindon & Gloucester Cooperative, Café Direct and Women’s Design Service. No indication of nonprofit organisations using the Balanced Scorecard were found. SIGMA: Sustainability-Integrated Guidelines for Management SIGMA is a combination of management and reporting principles to make organisations operate sustainably. It consists of a detailed set of principles, which revolve around two core elements.23 First it instructs the organisation to manage five different types of capital that reflect its impact and wealth. These are the typical well-known manufactured and financial capital. Added to these are measures of natural capital which represents the environment, as well as human and social capital, the people associated with the organisation and the social relationships and structures on which it depends. The management framework prescribes methods to make sure that, in the long-term, each form of capital will be maintained or enhanced.

The second core element is an exercise of accountability, of being transparent and responsive to stakeholders. This element is built into each step of the management framework, which emphasises the need for engagement with stakeholders. The last phase of the management framework describes principles of good practice in the reporting of an organisation’s impact.
SIGMA was developed jointly by the British Standards Institution, Forum for the Future, AccountAbility and the UK Department of Trade and Industry. There are many examples of its use in the private and public sector, but it does not seem to be widely adopted by third sector organisations. One exception is the Co-Operative Bank.

Environmental accounting
It is common for third sector organisations to produce some information about the social impact of their work. Such data can serve as the basis for TBL, if they are supplemented with measures of the organisation’s environmental impact. The following methods can be used for this purpose. Defra KPIs The Department for Environment, Food and Rural Affairs (Defra) has
developed a set of environmental indicators that organisations can use to report on their environmental performance. to the set comprises 22 key performance indicators (KPIs)24 encompassing crucial environmental impacts. The most relevant of these for third sector organisations are greenhouse gas emissions, the amount of waste created, and the use of resources such as oil and water. Defra’s KPIs are limited to measuring the immediate environmental impact of an organisation’s activities, and don’t capture the overall environmental outcomes of an organisation’s work.

Ecological footprint
The ecological footprint attempts to measure more than just the direct environmental burden an organisation creates – for example, through emissions-related energy use. It also includes the indirect burden related to products and services used by an organisation. This is done through using information from, for example, life cycle analysis that adds up the environmental impact of commodities from their production through to their disposal. The ecological footprint attempts to bring together the different environmental burdens caused by an organisation and relates them to the carrying capacity of the planet. The original indicator of an organisation’s ecological footprint is expressed in area measures, showing the extent of biologically productive land and marine area required to produce the resources that human activities depend on. The total amount of area required by an organisation to function can then be compared to the finite amount available. Such measures will show whether an organisation is using more than its equitable share of environmental services and whether the economy as a whole is working on a sustainable basis.

A more recent variation of the ecological footprint is the carbon footprint, which focuses only on the amount of direct and indirect greenhouse gas emissions that an organisation creates. In the UK, the Carbon Trust offers services for organisations to approximate and reduce their carbon footprints, including a web-based carbon calculator that facilitates a simple assessment.

Conclusion: TBL approaches in the third sector
This report shows that TBL practices are currently not wide-spread in third sector organisations. Larger NGOs or co-operatives quite consistently use some TBL method, but its uptake in smaller organisations is sporadic. One central challenge for the future is to create a shared set of principles on what TBL practices should involve. There are some promising signs of the
standardisation of TBL, particularly with the Government’s work around SROI. This is especially important for smaller third sector organisations, which often have a very limited set of resources available for such purposes and can find the diversity of approaches confusing.

Barriers to and enablers of the use of TBL
Acknowledging that the use of TBL approaches in the third sector is limited at present, the final part of this research set out to engage with third sector organisations around barriers and enablers to TBL measurement. It was intended that two workshops would be held – one with organisations already doing TBL measurement and one with organisations that would like to – and that these would also identify and inform priorities for action in subsequent years of the National Performance Programme (NPP). Despite attempts to recruit workshop participants through a wide-range of channels, only two organisations currently involved in TBL measurement came forward. This poor response no doubt reflects the paucity of such measurement actually taking place in the sector. It meant that only the workshop for organisations not already practicing TBL measurement went ahead; separate one-to-one conversations were carried out with those who came forward to participate in the workshop for TBL measurers. This section presents the results of that engagement. It is broken down by barriers, with the enablers suggested by participants listed beneath these. Priorities for action that come from these enablers are then summarised in section 7 of the report. It was intended that this report would look not just at the barriers, but also at the drivers of TBL measurement. The conversations with those already doing TBL measurement were not sufficient to enable conclusions to be drawn about its drivers. However, research by the Charities Commission suggests that the driver is often a key individual that champions the move to more environmental responsibility, but others also include pressure from service users/staff, involvement of trustees, scientific evidence, aiming for excellence, and funders.

Barrier 1:
It appears complex and difficult to navigate The world of impact measurement, whether TBL or not, seems complicated. It can be difficult to make sense of the many different approaches and tools that are available, especially for small organisations, or those just starting out.
Enablers
 Better guidance on what the tools are – something even simpler than nef’s Prove and Improve toolkit (www.proveandimprove.org).
 Peer-learning networks that connect organisations to others in their field or area that are measuring TBL.
 Better communication of existing resources and tools.
 Low-cost or free introductory training so that organisations at least know where to start.
 Increased awareness of existing supports (e.g. third sector development officers in local authorities).

Barrier 2: We lack the resources to measure impact
For the already-stretched third sector, TBL reporting can appear as yet another ‘ask’ that takes resources away from ‘real’ work. Willingness to measure is not so much the problem, as the lack of resources to do it. Where funders demand such evaluation, they should also resource it adequately.
Enablers
 Funders need to start allocating adequate budgets for evaluation. It is difficult for organisations that are applying for grants or bidding for contracts to ask for this and it seems that often funders are not actually aware of the resource implications of what they are asking organisations to do. There needs to be more lobbying at a higher level to change funding practice. Citizens Advice is currently doing some research into the cost of evaluation, which it is happy to share. It was agreed that such research would be helpful in making the case to funders about what constitutes an adequate and reasonable evaluation budget.
 Beyond getting funders to resource it properly, the benefits of such TBL measurement need to be better communicated to organisations and their staff so that they can understand the link between good measurement and improving how they deliver benefits.

Barrier 3: There’ll be resistance from staff
It can be hard to motivate staff, especially where measurement appears to be imposed and seems concerned just with ‘proving’ impact (especially to funders).
Enablers
 Better communication of the benefits of TBL measurement. Perhaps some case studies that clearly document the changes that have occurred within an organisation, both from a proving perspective (e.g. attracting additional funding) and from an improving perspective (e.g. increasing impact).
 The ‘case for measurement’ needs to be communicated at all levels of the organisation. ACEVO in April 2009 launched a campaign that targets the leaders of organisations to think about sustainability, but resources are also required that help communicate the benefits of good measurement to frontline staff. Fundraising and data management staff were identified as another key pressure point.

Barrier 4: We have lots of competing measurement demands
Organisations are often asked to report on very specific outputs or indicators and new approaches may ask them to measure different things.
Enablers
 Tools should, where possible, integrate with existing measurement requirements. This can be challenging where organisations currently predominantly report on outputs and the new approaches require reporting against outcomes.

Barrier 5: Most tools have a strong national or UK bias
Tools do not translate well beyond international boundaries due to cultural biases or because they presume from the outset that activities will be fairly localised. One representative from a charity that works internationally said that she could not see her organisation using any of the tools that had been presented in the workshop.
Enabler
 Tools should be adapted to recognise this bias. Involvement of charities working internationally will be key to identifying the main current problems with the tools and suggesting ways in which they can be made more useful.

Barrier 6: Most tools are focused on frontline organisations
Second-tier and infrastructure organisations can find the tools inappropriate or difficult to apply.
Enabler
 Tools should be adapted with the help of second-tier and infrastructure organisations. Some testing of tools with these organisations and then writing up the experience would be useful.

Barrier 7: There is an assumption that the problem around TBL
is a lack of environmental measurement – the reverse might also be true Materials and resources around TBL measurement and the third sector tend to presume that the problem is with socially focused organisations that are not adequately measuring their environmental impact. Yet, there is also sometimes a gap with environmentally focused organisations not sufficiently
measuring and reporting on the social impact of their activities.
Enabler
 Communication and resources should be framed in such a way that they come at the problem from both angles.

Barrier 8: Environmental add-on tools tend to just look at resource use rather than the environmental impact of activities
Environmental tools, such as carbon calculators, that are suggested as supplements to existing social impact measurement tend to focus just on resource use. This is very limited because it fails to capture the environmental impact of the organisation’s activities.
Enabler
 Make the distinction between resource use and environmental impact explicit and promote tools that take a more comprehensive look at the environmental impact of organisations. The Stern Review could be a good starting point for the environmental valuation. SROI is an example of a tool that looks beyond resource use.

Barrier 9: But commissioning is still focused on lowest unit cost
Outcomes measurement can seem pointless when the money in commissioning processes still follows lowest unit costs.
Enablers
 Encourage use of the techniques because of the improving benefits (i.e. they will help the organisation to better meet the needs of its beneficiaries and wider responsibilities), rather than just because it might bring in more funding.
 Continue to lobby for change at a higher level with funders and commissioners so that their practices are able to recognise full value.
 Give organisations the tools they need to encourage commissioners in their area to change practice (e.g. inform them of the Treasury guidance around value-for-money assessments).
Other recommendations and issues raised by workshop participants
 Activities and efforts in this area should connect with what is happening elsewhere in the wider ‘third sector movement’ – for example, Third Sector Research Centre (TSRC in Birmingham);
John Moores University.
 There is a danger in just backing one approach that all organisations would be measured against. It was felt that this could disadvantage smaller organisations especially, as they may not have the resources to invest in complex evaluations.
 The issue of competitors artificially inflating assessments was raised several times. The need for standardised approaches to valuing was raised as a possible counter (e.g. the Cabinet Office database of indicators and proxies) and also for independent verification to become a requirement for good practice.
 A question was raised about the inter-relationship between social, environmental and economic outcomes. Can there be such a thing as ‘add-on’ environmental/social measures?

Priorities for action
The review and stakeholder engagement identified several priority areas for action in relation to TBL measurement. Should the NPP proceed with further work around TBL measurement, we recommend the following as areas for intervention:

1. Communicating more clearly the benefits of doing TBL (‘making the case’) and those resources that are already available. This may in part be addressed by the campaign that ACEVO is launching around sustainability, but could also be achieved through an additional campaign for development workers in infrastructure organisations and/or articles in the sectoral press. It
would be useful to collate more information about the experiences of organisations that are undertaking TBL measurement, with a particular focus on the costs and benefits of doing so.

2. Advocate for more resources to be made available to third sector organisations for evaluation. Workshop participants repeatedly called for national programmes, such as NPP, to raise
awareness among funders and commissioners of the resources required to carry out quality evaluations and to lobby for the provision of these when an organisation is funded. This may require
the collation of evidence around costs and benefits of evaluation.

3. Develop tools to address the weaknesses in relation to  second-tier, campaigning and infrastructure organisations and  use by international organisations. These are gaps not unique
to TBL measurement; development in this area would advance social measurement generally.

Conclusion
With the pressure of the economic downturn making itself felt in the third sector, it can be tempting for organisations to divert resources from impact measurement. Yet, good impact measurement is essential if organisations are to allocate their resources in such a way that they maximise positive outcomes for their primary beneficiaries and also in response to wider social, environmental and economic challenges. For impact measurement to meet these objectives, it will by definition need to be able to capture outcomes across a triple bottom line. This report has revealed that uptake of such approaches is still very limited within the third  sector and that a number of significant barriers still exist. nef recommends three priority areas for intervention:

1. Communicating more clearly the benefits of TBL (‘making the case’) and those resources that are already available.

2. Advocating for more resources to be made available to third sector organisations for evaluation.

3. Developing tools to address existing weaknesses in relation to second-tier, campaigning and infrastructure organisations and the use by international organisations.