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Purpose

The purpose of this paper is to describe how Barnardo's, a large children's charity, has developed a system for measuring and reporting on service user outcomes as part of its performance management approach. The challenges that confront third sector organisations when adopting this approach are summarised, as are the benefits that can accrue.

Design/methodology/approach

The paper's approach is to describe the development of an outcome monitoring tool (OMT) and to explore some of the benefits of and challenges to embedding this tool across Barnardo's services.

Findings

Third sector organisations operate in competitive, resource‐constrained environments, where funding arrangements are often short‐term and piecemeal. The ability to evidence the effectiveness of services through demonstrating positive outcomes for service users is becoming an increasingly important factor in the process of securing and sustaining funding. An outcome‐focused approach contributes to the development of excellent services by helping to ensure that services are making a difference to the people that use them. Barnardo's OMT offers a model for evidencing the impact of services on the people who use them, thus contributing to the organisation's competitive edge.

Originality/value

This paper is informed by current thinking on outcomes and evidence‐based practice and offers a practical example of how to implement an outcome‐focused approach in a third sector organisation.

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