A number of Pilotlight’s partner charities are recognising that to remain competitive and justify what they do, they need to show a ‘social return on investment’. Join in the debate and share your experience. We’d like to hear your views on this subject. Have you tried it? What impact has it had on your funding? Has it helped you focus your resources?
Social Return on Investment (SROI) involves measuring social outcomes in a quantifiable way. For example, a charity engaged in rehabilitating prisoners could look at the re-offending rate of people it had worked with and compare it to the re-offending rate of a similar population of prisoners. A positive difference would enable the charity to argue that investment in its activities had a positive social return. This return would be calculated by showing the lower cost to the State of reduced re-offending (comprising lower criminal justice costs; lower prison costs and possibly lower welfare costs) compared with the cost of the services provided by that charity.
Scott Greenhalgh, Chair of Pilotlight’s Evaluation committee, says: “We believe it is increasingly important for charities to demonstrate to their funders the social impact of their work. In some cases it will be possible to express this as a SROI, showing that the benefit to society of that charity’s work is £y for every £x the charity receives. Part of the Pilotlight process is to help charities measure and articulate their impact on society; this is not an easy process, however we do believe it is important to focus on this area, especially at this time of budget constraint.”
A report last year by the think-tank, Demos found that there has been a recent surge in interest in SROI thanks to its unique feature of attributing monetary values to ‘soft’ outcomes. However, many organisations are struggling to measure outcomes adequately in a quantitative way.
Dan Ritman, Pilotlight’s Evaluation Manager, says: “It can be hard for some organisations but the basic concept of evaluating your work to show how money is spent and the impact you are having is fundamental to attract more funding.”
A useful resource is the SROI network. Several organisations share their experience of SROI and there is a guide to SROI. Here is one quote from the site:
"Using SROI to explore the value of our online question and answer service, askTheSite, helped us develop new mechanisms for speaking to young people and gain a real insight into the impact of our work. The project enabled us to demonstrate YouthNet's commitment to robust impact measurement as well as our commercial approach to project evaluation. Perhaps most importantly, being able to assign a monetary value to askTheSite has enabled YouthNet to convey to current and potential funders how valuable the service is for both young people and the wider society in a language that they understand"- Sarah McCoy, YouthNet
From http://www.thesroinetwork.org/content/view/81/95/
Another useful resource is a guide to SROI, published by the Cabinet Office and available to download for free from this link:
http://www.neweconomics.org/publications/guide-social-return-investment