'Monitoring and evaluation' is the process of recording a charity's activity programme, the people who participate in this, and calculating the impact or overall success of their actions. Depending on the goals of your non-profit, you may measure impact in different ways - it might be important to increase your engagement with a specific demographic of people, or you may be looking to measure how people's performance or prospects improve as a result of working with you. Monitoring and evaluation processes allow a charity to measure their success in achieving their organisational goals (for example, whether their have hit Key Performance Indicators), and help to shape the future of their activities to continously improve their impact.

Depending on how a charity receives their funding, they may have an obligation to monitor and evaluate their impact in different ways. It's very common for funders to require monitoring and evaluation, so they can assess how their money was spent and the impact this has had. For example, National Portfolio Organisations receiving funding from Arts Council England are currently required to submit monitoring data to the Illuminate system. Other funders might have more specific requirements, depending on the project they are providing funding for. Aside from funder obligations, many charities choose to conduct their own monitoring and evaluation too. This can help them to understand the outcomes of the work they do, and provides good guidance for any changes and improvements they might need to make to their activity.