Social Return on Investment (SROI) and the SROI NetworkAn introduction…

What I want to do…

• Where has Social Return on Investment come from?

• What is SROI?

• What are the principles and benefits of SROI?

• What is the SROI process?

• Case study….

• Further information…

SROI – background…

• Brought into Europe in 2002 from the Roberts Enterprise Development Foundation, USA

• Developed by nef as part of the Quality and Impact Project 2005 by blending other accountability approaches

• Trialled in Scotland as part of EU project• SROI UK formed…now the international ‘SROI

Network’• Backed by UK and Scottish governments during

2009-2011 through the SROI Project

SROI – definition…“SROI is...• An approach to understanding and managing the value

social, environmental and economic outcomes created by an activity or an organisation. It is based on a set of principles that are applied within a framework.

• SROI seeks to include the values of people that are often excluded from markets in the same terms as used in markets, that is money, in order to give people a voice in resource allocation decisions. SROI is a framework to structure thinking and understanding. It’s a story not a number. The story should show how you understand the value created, manage it and can prove it.’

SROI reports…

SROI = a RATIO of investment to social return + a full report detailing the STORY of CHANGE for your activity

Why SROI needs principles, a framework and a set of

standards

‘Social value is expensive and difficult to measure and results could easily be rigged by organisations applying to gain or retain contracts’ Commissioner’s quote

Principles

Social Return on Investment

Understand the way in which the organisation creates change through a

dialogue with stakeholders

Understand what changes

Value the things that matter (using financial proxies to represent value to stakeholders)

Only include what is material

Do not over claim

Be transparent

Verify the result

‘Social value’ represents changes we know are important to society but which we can’t take account of when making decisions

• We have become good at counting things and less good at understanding change

• We tend to ignore negative change when making decisions, which can lead to the wrong decisions

• We have relied on easy to measure things when making decisions

• We have therefore excluded outcomes which are important to certain stakeholders because we cannot take them into account

Valuation is therefore a way of including important outcomes that don’t have a ‘market’ value and ensure that decision-making includes the value of these outcomes

What is this thing ‘social value’ and why use financial proxies?

• Communicate the SOCIAL VALUE generated by an organisation, project or activity to funders, management and stakeholders

• Maximise social value creation by developing organisations or activities based on an understanding of change; improve resource allocation and planning; improve and streamline monitoring and evaluation

SROI – the benefits…

SROI – process…1. Establishing scope and identifying key

stakeholders

2. Mapping inputs, activities, outputs and outcomes (by stakeholder engagement to create an impact map)

3. Evidencing outcomes and giving them a value

4. Establishing impact

5. Calculating the SROI Ratio

6. Reporting, using and embedding

Looking at an impact map…• Basic example on flipchart: Stakeholders, changes, inputs, outputs,

outcomes, unadjusted impact, deadweight, attribution, drop off, IMPACT

• Ratio of investment to return….allowing for….– Deadweight – tried to separate what would have happened

anyway– Attribution – how can we claim change is due to one

organisation?– Drop off – the affect from the change declines over time

• Example given Wheels-to-Meals• Just get the idea…• Logical concept…

Inputs Outputs Outcomes Impacts

Tells the story of the changes experienced by a stakeholder as a result of an activity, and puts a value on that change

Inputs - resources invested in the activity

Outputs - the direct and tangible results from the activity, i.e., people trained, trees planted, products sold

Outcomes - changes to people or services resulting from the activity, i.e., a new job, increased income, improved stability in life

Impact = Outcomes less an estimate of what would have happened anyway ie. minus attribution, deadweight, drop off, (displacement)

Theory of Change

SROI – mapping impact…

Stakeholder Outcome Indicator Possible Financial Proxy

Person with mental health problem

Improved mental health

Change in the use of mental health services

Cost of commercial counselling services as a proxy for value

SROI – process…

The Refresh social prescribing project works with patients of Salford Health Matters (GP practice-based social enterprise) to ‘prescribe’ them a range of exercise, social activity and community-based activity (eg. allotments, exercise classes, art classes, etc.) in order to improve their physical and mental health and reduce reliance on medication and GP’s

Outcomes for patients: stopped smoking, lost weight, improved well-being, etc.

Outcomes for the health system: fewer GP visits, reduced use of anti-depressants, reduced obesity, etc.Calculations: a return for every £1 invested of around £9

SROI study made internal recommendations

SROI - case study… Refresh

• Evaluative: conducted retrospectively and based on evidence of actual outcomes that have taken place over a given evaluation period

• Forecasted: predicts how much social value will be created if the activities meet their intended objectives

SROI – different types…

• SROI Network - www.thesroinetwork.org – a membership body offering methodology development, training, assurance and regional networks

• Guide to SROI downloadable from website• Online database of indicators and financial

proxies at www.wikivois.org. Being a wiki database, it is open access for people to put in their own indicators and proxies, which will then be moderated for robustness and quality

SROI – further information…