Social Return on Investment (SROI)
Cabinet Office Guide
In May 2009 the Government launched its guide to Social Return on Investment (SROI). It is a framework for measuring value and improved wellbeing by incorporating social, environmental and economic costs and benefits and is designed to help charities and social enterprises compete for public service delivery contracts - an indication of what statutory commissioners will be looking towards in the future.
The following is a quote from the introduction to the SROI guidance:
"While many third sector organisations have a powerful story to tell, the social and environmental value of the impact being made is often underplayed. As we face tough economic times, it is now more important than ever that we allow for better recognition of those who create social and environmental value, leading to more efficient movement of resources to the right people, in the right place, at the right time".
This guide offers a framework for measuring and accounting for a much broader concept of value; it seeks to reduce inequality and environmental degradation and improve wellbeing by incorporating social, environmental and economic costs and benefits.
Click here for a copy of the full guide
Social Investment made simple
The term ‘social investment’ covers the different types of financial activity used to create social impact. KnowHow nonprofit organisation explore the main investment types available to you as a voluntary sector organisation. Know How will help you understand the terms involved so you can decide whether social investment is right for your organisation.
The New Economics Foundation (nef)
This independent 'think and do tank' carried out some research in this area and subsequently offer a set of principles for policy-makers that are a distillation of the findings. They say there is an urgent need for the adoption of approaches such as Social Return on Investment (SROI) and recommend that policy-makers embed the following principles across public services.
- Measure for social, economic and environmental outcome.
Measures should provide information that improves our understanding of the relationship between specific interventions and the well-being of individuals, communities and the environment. Measures should be focused on outcomes: the positive and negative change in people's lives, communities or the environment as a result of policy. - Measure with people
The people who are closest to or most affected by an activity are uniquely positioned to identify its effects, whether positive or negative. They should therefore be involved as deeply as possible when creating and revising indicators. Without this input, measurement is unlikely to capture what really matters to people. - Value the things that matter most
Financial considerations have a tendency to drive policy-making. It is only by making social and environmental outcomes visible and assessing them on the same terms as traditional costs and benefits that we can ensure that they are not squeezed out. Finding ways to quantify, value and account for negative outcomes is equally important, not just to get a fuller picture of the returns on investment but also to incentivise organisations to minimise them. - Be responsive
Effective measures will provide evidence that can be used to inform future implementation and decision-making - but what is also required is that government is able and willing to learn from what the evidence says, and from past experience. - Avoid over-claiming
Measures should identify the difference that particular policies have actually made, and how much of a policy's impact can be attributed to specific interventions. This helps to avoid double-counting of policy impacts and allows decision makers to pinpoint those policies that actually do bring about desired outcomes. - Transparency and accountability should inform everything
Decisions makers should be able to justify why they have chosen the measures used. This involves making explicit the basis on which they have prioritised what to measure. - Measure strengths as well as risks and deficits
Measuring people's strengths and abilities allows policy makers to focus on how best to enable people to succeed, rather than focusing solely - as many policies do - on what people lack and why they fail.
Their vision of what government decision-making should look like is therefore participative, responsive and focused on bringing about a more just and sustainable society - one that promotes real well-being for all, in the most comprehensive sense. In order to realise this vision, they believe that government should follow these principles to develop indicators, measures and systems that make measuring what matters an everyday reality. Click here for a copy of their report