SROI - Moving the conversation from cost to value - SiMPACT

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Have you measured your SiMPACT today?
Introducing SROI
Moving the Conversation from Cost
to Value
Canadian Evaluation Society
Conference 2013
June 11, 2013
Anne 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

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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

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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 Steps
1. 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 Stakeholders
What 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

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Application of SROI Methodology
Where 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
0
5
10
15
20
25
30
35
40
45
50
Understanding of
value of outcomes
Communicating
value
Increased staff
morale
Program delivery
improvement
Understanding of
value experienced
by clients
Understanding of
value experienced
by others
SROI Benefits (experienced or anticipated)

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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

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Questions?
www.simpactstrategies.com
www.sroi-canada.ca
@simpactstrat

SROI - Moving the conversation from cost to value - SiMPACT

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