Last week I attended the Annual Members Exchange of Social Value UK, it was a great event and an opportunity to find out how people from all sorts of organisations, both large and small, are working with Social Value and Social Return on Investment.
What is Social Return on Investment (SROI)?
Social Return on Investment (SROI) is an approach that measures a broader concept of value than is usually accounted for in cost-benefit calculations. Developed from traditional cost-benefit analysis and social accounting, SROI is a participative approach that is able to capture 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, and a ratio that states how much social value (in £) is created for every £1 of investment. Put simply, SROI is about much more than just about number, it is about change. It is about the stories of your stakeholders, the difference made. It includes qualitative, quantitative and financial information on which to make decisions.
The seven principles of SROI
I was initially drawn to SROI when I heard about the seven principles – the ideas of stakeholder involvement and transparency were particularly appealing. The principles are:
- Involve stakeholders
- Understand what changes
- Value the things that matter
- Only include what is material
- Do not over-claim
- Be transparent
- Verify the result
Six stages in calculating SROI
SROI can be performed as an evaluation of work that has already taken place or a forecast, to predict the value of a project before it has even begun.
There are six stages in calculating SROI:
- Establishing scope and identifying key stakeholders – Setting the boundaries of the research and identifying key stakeholders.
- Mapping outcomes – .Through engagement with the stakeholders, an ‘impact map’, or map of change, can be developed which shows the relationship between inputs, outputs and outcomes. This impact map considers the social value of changes in the participant’s lifestyles and wellbeing that were provoked by their engagement with the project or activity.
- Evidencing outcomes and giving them a value – This stage involves data collection to establish what outcomes have taken place, and then assigning monetary value to them.
- Establishing impact – .Having collected evidence on outcomes and monetised those, the aspects of change that would have happened anyway, or are a result of other factors, are eliminated from consideration.
- Calculating the SROI – This stage involves adding up all the monetised outcomes, subtracting any negatives, in most cases, the cost of the project, and comparing the result to the investment.
- Reporting, using and embedding – This last step involves sharing findings with stakeholders and responding to them, embedding good outcomes processes.
Why should you value Social Return?
When I undertook my Social Value UK Practitioner Training, I met others from a wide range of organisations who were keen to engage and involve stakeholders and who understood that their work had huge value which was often overlooked or under valued. These were organisations and individuals who wanted to give the voice back to stakeholders and allow them to establish the outcomes that matter the most TO THEM.
No -one can argue with this, it’s a ‘no brainer’. What’s also so appealing about this is that for those who have undertaken SROI, the outcomes are not always what were predicted and this kind of knowledge is (in my view) essential for service providers. Of course with my ‘fundraiser hat’ on, this is all great too as funders are increasingly leaning towards and SROI approach and those that are adopting it have the competitive edge.
There are many reasons why you may choose to measure Social Value. The Cabinet Office Guide to Social Return on Investment outlines what it sees as the main advantages:
SROI can help you improve services by:
• Facilitating strategic discussions and helping you understand and maximise the social value an activity creates
• Helping you target appropriate resources at managing unexpected outcomes, both positive and negative
• Demonstrating the importance of working with other organisations and people that have a contribution to make in creating change
• Identifying common ground between what an organisation wants to achieve and what its stakeholders want to achieve, and what its stakeholders want to achieve, helping to maximise social value
• Creating a formal dialogue with stakeholders that enables them to hold the service to account and involves them meaningfully in service design
SROI can help make your organisation more sustainable by:
• Raising your profile
• Improving your case for further funding
• Making your tenders more persuasive
For those interested in finding out more about SROI, the Social Value UK website is well worth a visit as it includes numerous case studies and excellent tools (including the Social Value Self Assesment Tool).
Through our sister arm, Client Voice, we offer a range of research, consultation and evaluation services, including Social Return on Investment, so do get in touch if you’d like to find out how we can help!
