sroi - moving the conversation from cost to value - simpact

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

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:

Who is Seeking to Value Impact?

Third Sector

Public Sector

Private Sector

Entrepreneurs

Convenors

Definitions and Overview

“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?

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

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

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

SROI Today

Understanding the SROI Process

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

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?

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

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?

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

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.

• 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

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

The database

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?

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

…a Story Not a Number

Step Six: Reporting, Using, Embedding

Application of SROI MethodologyWhere and how is it being used?

Individual Program Evaluation or Forecast

Understanding Asset Management

SROI Across Multiple Programs

• Demonstrating a range of value• Avoiding comparison of ratios• Speaking to the value of a sector

as a whole

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

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

What SROI Users are Saying

Understan

ding of v

alue o

f outco

Communicating v

Increase

d staff

Progra

m delive

Understan

ding of v

alue e

by clie

Understan

ding of v

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by others

101520253035404550

SROI Benefits (experienced or anticipated)

Additional Resources

SROI Canada Network

www.sroi-canada.ca

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

Facilitation of Accreditation

• Accreditation training

• Practitioner database

• Connection to International SROI Network

Practitioner Database

• To develop a database for SROI practitioners

• To identify accredited practitioners

• Submit at: http://www.sroi-canada.ca/methodology/sroi-practitioner-list

Questions?

www.simpactstrategies.com

www.sroi-canada.ca

@simpactstrat

sroi - moving the conversation from cost to value - simpact

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