sroi - moving the conversation from cost to value - simpact
DESCRIPTION
Presented by SiMPACT Strategy Group's SROI Team Lead Anne Miller on June 11, this presentation offers a quick overview of the Social Return on Investment methodology and how it is being used to communicate the value of social change.TRANSCRIPT
1
Have you measured your SiMPACT today?
Introducing SROIMoving the Conversation from
Cost to Value
Canadian Evaluation Society Conference 2013
June 11, 2013Anne Miller
SiMPACT Strategy Group
2 www.simpactstrategies.com
Agenda
• Introductions• SROI Definitions and Overview• Understanding the SROI Process• Application of the SROI Methodology – Where and how
is it being used?• Additional Resources• Questions and Discussion
3 www.simpactstrategies.com
Introductions
Portfolio & Project Performance Measurement
Leadership in Reporting & Communications
Network of Professionals
The Highest Standard in Community Investment.
Social Value Creation, Measurement & Evaluation• Social Return on Investment (SROI)• Community investment measurement &
evaluation• CI/CSR management systems• Education & skill development across
social-purpose organizations
SiMPACT Strategy Group is a founding Network Partner of:
4 www.simpactstrategies.com
Who is Seeking to Value Impact?
Third Sector
Public Sector
Private Sector
Entrepreneurs
Convenors
5
Have you measured your SiMPACT today?
Definitions and Overview
6 www.simpactstrategies.com
“SROI measures change in ways that are relevant to the people or organisations that experience or contribute to it. It tells the story of how change is being created by measuring social, environmental and economic outcomes and uses monetary values to represent them. This enables a ratio of benefits to costs to be calculated.”
Nicholls et al. A Guide to Social Return on Investment. (April 2009: Office of the Third Sector): 8
What is Social Return on Investment?
7 www.simpactstrategies.com
Purpose of SROI?
• To assign value to social change
• To enhance communications
• To forecast potential value
• To evaluate the value of an investment
• To make a business case for investment
• To improve processes and practices
8 www.simpactstrategies.com
An SROI is …. An SROI is not ….• A framework to gather investment
information, evaluation results and describe what occurred as a result
• A method to ensure that the story of social value creation is presented in terms that a cross-section of interests can understand
• Constructed upon the framework of an outcomes model
• Necessary if social value is to be presented in relation to environmental and financial
• A calculator
• A tool for comparison of programs based on return ratios
• A replacement for evaluation tools (it is an information framework)
• Useful for every investment or situation
• Difficult, as long as the guiding logic model and outcomes framework are clear, and an evaluation system is either in place or envisaged
9 www.simpactstrategies.com
Enhancing, not replacing current practice
Linking Logic Model, Evaluation Plan, Tools & SROI
Logic Model
Draft Evaluation Plan
Forecast Value (SROI)
Enhanced Evaluation Plan
Evaluation Tools
Change results populate SROI
forecast
START HERE
10 www.simpactstrategies.com
SROI Today
11
Have you measured your SiMPACT today?
Understanding the SROI Process
12 www.simpactstrategies.com
SROI: A Principles-based Approach• Involve stakeholders
• Understand what changes
• Value the things that matter
• Only include what is material
• Do not over-claim
• Be transparent
• Verify the result
13 www.simpactstrategies.com
Five Fundamental Questions
• Who changes? Who are the target stakeholders?
• How do they change? What happens to them? What would otherwise happen to them?
• How do we measure the change? Which indicators will illustrate change? Over what time period?
• What would have happened without intervention? What are the long-term impacts and costs of non-intervention?
• What is the change worth? What would your stakeholders tell you?
14 www.simpactstrategies.com
SROI Steps1. Establishing Scope and identifying stakeholders: Develop Theory of
Change summary statement, consider timeframe, determine scope
2. Mapping Outcomes: Consider what changes and what the alternative would have been
3. Evidencing outcomes and giving them a value: Find appropriate indicators and financial proxies
4. Establishing Impact: Discount for attribution, deadweight, displacement, drop-off
5. Calculating the SROI: Determine the SROI ratio
6. Reporting, using, and embedding: Communicate the results, continue development, enhance practice
15 www.simpactstrategies.com
Step One: Establish Scope, Identify StakeholdersWhat is the program that will be analyzed?
Who are the target stakeholders?
Is it evaluation or forecast?
Who is the intended audience?
What happened because of the program?
What would have happened in the absence of the program?
Who else will be affected?
16 www.simpactstrategies.com
Step Two: Mapping Outcomes
Stakeholder Activity Output Outcomes Indicator Alternative Outcomes
Who is engaging in the activity?
What are they doing?
What are the direct results
of the activity?
What change is the stakeholder experiencing?
How do you know the change has taken place?
What would have happened without
your program?
• More detailed than a logic model
• No differentiation between short, medium, and long term outcomes
• Listing of alternative outcomes
• Ideas for valuation and inclusion in calculations
17 www.simpactstrategies.com
Step Three: Evidencing Outcomes and Giving Them a Value
Assigning financial proxies to outcomes
What is a ‘financial proxy’?
Financial proxies are estimates of financial value where it is not possible to know an exact value, such as with social returns and so are critical for accurately estimating Social Return on Investment.
18 www.simpactstrategies.com
• Value created from the outcomes achieved
• Value created by avoiding the alternative
• Value from the stakeholder’s perspective
The SROI Canada Network administers a Financial Proxy Database that can be used to find useful values that relate to the pubic sector in Canada.
Step Three: Evidencing Outcomes and Giving Them a Value
19 www.simpactstrategies.com
SROI Canada Financial Proxy Database
• Currently free public access• Membership in SROI Canada• Development of local
research across Canada• Development of subject-
specific research• Sharing of ideas for case
studies• Submission of proxies
through SROI Canada website
20 www.simpactstrategies.com
The database
21 www.simpactstrategies.com
Step Four: Establishing Impact
1. Timeframe: How long will each change last without further investment ?
2. Drop off: Will the effects of the program diminish over time?
3. Attribution: What portion of the change was due to the work of someone else?(i.e. other initiatives, partners outside your budget, referral system, momentum from another source)
4. Deadweight: What portion of the change would have happened anyway? (i.e. would anyone have made the change without you?)
5. Displacement: Was any other positive activity displaced in order to achieve the outcomes? Were there unintended outcomes?
22 www.simpactstrategies.com
Step Five: Calculating the SROI Ratio
• Divide all value created by the total investment to receive an XX : 1 ratio (a demonstration of the return for each dollar invested)
• It shows the ratio between the amount invested and the amount created in social value (or the amount systemically saved)
• Ratios cannot be compared between programs unless the programs are very similar, addressing the same social issue, and working with the same stakeholders
23 www.simpactstrategies.com
…a Story Not a Number
Step Six: Reporting, Using, Embedding
24
Have you measured your SiMPACT today?
Application of SROI MethodologyWhere and how is it being used?
25 www.simpactstrategies.com
Individual Program Evaluation or Forecast
26 www.simpactstrategies.com
Understanding Asset Management
27 www.simpactstrategies.com
SROI Across Multiple Programs
• Demonstrating a range of value• Avoiding comparison of ratios• Speaking to the value of a sector
as a whole
28 www.simpactstrategies.com
SROI Across Multiple Programs• Chosen as a result of value not
clearly understood• 19 sites, 5 chosen as participants• Combined consulting & capacity-
building• Results of each SROI then
combined into program-wide report
• Results confirmed with agencies to ensure value represented agency and client perspectives
29 www.simpactstrategies.com
Evaluation of a Range of Investment• Premier Redford set up Safe Communities
Secretariat, including $60 million for Crime Prevention Initiatives
• 88 Projects Required to Forecast Value and Integrate SROI into Evaluation Plans
• Three years of training, set up, progress support, research and knowledge sharing
• Changing the nature of inter-departmental conversations about investment in social initiatives
30 www.simpactstrategies.com
What SROI Users are Saying
Understan
ding of v
alue o
f outco
mes
Communicating v
alue
Increase
d staff
moral
e
Progra
m delive
ry im
prove
ment
Understan
ding of v
alue e
xperi
enced
by clie
nts
Understan
ding of v
alue e
xperi
enced
by others
05
101520253035404550
SROI Benefits (experienced or anticipated)
31
Have you measured your SiMPACT today?
Additional Resources
32 www.simpactstrategies.com
SROI Canada Network
www.sroi-canada.ca
33 www.simpactstrategies.com
SROI Canada Network
• Accreditation training: 90 participants across Canada to date
• Methodology hub and website: 494 visits in May
• Financial Proxy Database: 130 members
• LinkedIn Group: 326 members
• Connection with International SROI Network
ActivitiesFounding Partners
34 www.simpactstrategies.com
Facilitation of Accreditation
• Accreditation training
• Practitioner database
• Connection to International SROI Network
35 www.simpactstrategies.com
Practitioner Database
• To develop a database for SROI practitioners
• To identify accredited practitioners
• Submit at: http://www.sroi-canada.ca/methodology/sroi-practitioner-list
36
Have you measured your SiMPACT today?
Questions?
www.simpactstrategies.com
www.sroi-canada.ca
@simpactstrat