The question Hong Kong charities must answer

Hong Kong is home to numerous charitable institutions that are dedicated to assisting others, but often lacks a clear understanding of the tangible impact these organizations have on the community. This is where the Hong Kong Jockey Club (HKJC) Charities Trust's first impact report comes into play. While the act of publishing such a report may seem like a standard procedure for any organization, it raises a larger question: how should organizations with a public or social role be evaluated?

Large charities, public bodies, and companies have become adept at reporting their expenditures, initiatives, and the number of people they reach. These metrics can indicate scale and, at times, efficiency. However, they fall short in demonstrating whether individuals' lives have improved, a requirement was satisfied, or a problem has been effectively mitigated in a lasting manner.

Impact reporting seeks to address this gap by posing a more challenging question: what changes occurred as a direct result of the work carried out?

As the leading philanthropic donor in Asia, the HKJC Charities Trust's decision to publish such a report could serve as a valuable example for others in Hong Kong and around the world. The report evaluates the trust's major programs from 2022-23 to 2024-25, presenting early evidence of the positive changes these initiatives have brought about. It also recognizes the importance of involving grantees and beneficiaries in the measurement process, acknowledging that the approach remains experimental.

However, impact measurement is not a neutral concept. Deciding what constitutes success and which evidence should be given weight is a critical task. Those decisions can favor quantifiable outcomes while downplaying less visible yet potentially more significant changes. This issue extends beyond philanthropy to other sectors as well.

For instance, Hong Kong's postal service is currently under review as the government considers reforms to address its financial losses. While these losses are a concern, they do not provide a comprehensive answer to the broader question of the service's purpose.

Similarly, philanthropy faces challenges in demonstrating the impact of its work. Counting grants, projects, and participants is relatively straightforward, but showing how a youth scheme helped a young person stay in school or how support for caregivers improved their lives over time is far more complex. Participant numbers indicate reach, not consequences. If a report only presents activity, the language of impact may appear superficial.

Hong Kong has made progress in addressing this issue by adopting environmental, social, and corporate governance (ESG) rules for corporate reporting and by having the Audit Commission evaluate the effective use of public funds. While these measures improve accountability, they do not directly answer the question of whether an institution has fulfilled its stated purpose.

Another challenge lies in the fact that impact is often defined from a top-down perspective, with decision-makers determining what success looks like before seeking input from those directly involved in the work. However, frontline organizations and service users may have different perspectives on what constitutes success. Their insights are crucial for providing a comprehensive assessment of an institution's performance.

Impact measurement also creates its own incentives. Short funding cycles encourage the pursuit of quick returns, while dashboards present tidy numbers that are attractive to stakeholders. Effects that develop gradually may be overlooked because they cannot be neatly tied to a specific intervention. Consequently, institutions might find themselves managing for the report rather than for the work itself.

To ensure the credibility of an impact report, it is essential to explain not only what changed and for whom but also how confidently that change can be attributed to the work. The report should identify the definition of success used and acknowledge where the evidence is weak or the results are disappointing. Acknowledging failures is not a flaw in impact reporting; rather, it is a vital aspect that enhances the exercise's usefulness.

The publication of the HKJC Charities Trust's impact report marks a significant first step towards fostering a more robust culture of accountability among institutions that claim to serve the public good in Hong Kong. While activity is easy to document, the real challenge lies in demonstrating that the work has produced meaningful change.