Turning Social Return on Investment on Its Head (original) (raw)
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Education, Knowledge and Economy, 2008
This article considers the methodological challenge of quantifying the social value generated through social enterprise activity. It argues that in the context of increasing enthusiasm for social enterprise as a mechanism for delivering social services and for tackling social exclusion, it is increasingly necessary to be able to value social impacts. Further it will be necessary to be able to assess the potential creation of social value from different investments in social enterprise. Specifically, this article considers methodology of social return on investment (SROI). SROI has become increasingly promoted in both policy and practice in the United States and the United Kingdom. This article considers the development of this methodology and draws on lessons from international development to highlight the limitations of the current use of SROI.
Evaluation and Program Planning, 2017
Since the early 2000's there has been growing interest in using the Social Return on Investment (SROI) as a measure for assessing the performance of social enterprises. By analogy with its business counterpart, the Return on Investment (ROI), the SROI is a metric that compares the monetized social costs of a program with the monetized social benefits of achieving an outcome (or set of outcomes). For example, calculating the SROI of a nonprofit halfway house for drug addicts might involve estimating the reduced social costs attributable to successful rehabilitation of addicts, and comparing this to the social costs of operating the halfway house. Alternatively, the total return of a for-profit social enterprise providing affordable housing might consist both of the traditional private return on investment along with the economic value of meeting the housing needs of lower income households. Early descriptions of the methodology for calculating the SROI suggest that the approach initially evolved from standard methodologies found in the business finance literature for evaluating investments, with the important twist that nonprofit sector returns/payoffs are defined in broader social terms (Thornley, Anderson, & Dixon, 2016). Yet, someone who is familiar with the economic literature on cost benefit analysis (CBA) as it is applied to the evaluation of public programs cannot help but be struck by the similarity between the outcomes that CBA is intended to measure, and those that are the object of efforts to calculate the SROI. One implication is that the literature on the theory and practice of cost benefit analysis offers useful lessons about how to measure the social return on investment, as well as about potential caveats and limitations that need to be confronted when attempting to undertake an analysis of the SROI. The paper discusses the potential uses and limitations of CBA and SROI as tools that governments, private donor/investors, and foundations can use to help set funding priorities, and evaluate performance. It summarizes: (1) the conceptual foundations of CBA and its application to SROI analysis, (2) issues raised in the implementation of CBA and SROI in practice, and (3) discusses when CBA and/or SROI approaches are a useful lens for setting priorities and/or evaluating performance, as well as important limitations of such methods.
The ambitions and challenges of SROI (social return on investment)
2010
With the growing interest in measuring the social impact of third sector activities, there have been a range of approaches developed. One of these, social return on investment (SROI) has received particular attention and is being promoted by third sector organisations, as well as public and private bodies. This paper examines this approach in detail and identifies a series of issues that require further investigation. These include technical and methodological issues related to this adjusted costbenefit analysis such as quantifying the value of social benefits, and attribution; the judgement involved in setting indicators; whether projects deemed successful based on an SROI analysis can provide the basis for replicability and scaling up; and the ways in which SROI is being used by stakeholders. Through examining these challenges in detail, the approaches to measuring social impact can be strengthened, standardised and made more rigorous. While the issues raised here are essential to developing SROI further, they are also valid for more general discussions regarding the proving and improving of the value added by the UK third sector.
Issues in Using Social Return on Investment as An Evaluation Tool
Evaluation Journal of Australasia, 2017
Social return on investment (SROI) is an approach built on cost benefit analysis and is used in the evaluation of projects with social benefits, as an alternative to cost benefit analysis and theory-based evaluation. This paper provides an analysis of SROI as an evaluation tool compared to theory-based evaluation, based on an evaluation of a community based mental health rehabilitation program in regional South Australia. The paper describes the process of constructing a SROI impact map and identifies the issues at each stage. Establishing the resources used, the activities and the outputs appears relatively straightforward. Arriving at an agreed theory of change is much more contested, even when using a high level of involvement of the service beneficiaries. The single greatest difficulty is to find the indicators and the financial proxies to value the outcomes. Outcomes such as improved wellbeing are difficult to value. It is particularly difficult to establish the level of outcom...
Nonprofit Management and Leadership, 2015
Common Ground Cooperative (CGC) provides training, administrative, and job coach support to five social enterprises for which persons with developmental disabilities are the non-share-capital partners. This study examines the use of social return on investment (SROI) as a means of determining the value of program impacts related to quality-of-life changes for enterprise partners and their families. The process of conducting this SROI analysis is described and analyzed in terms of its utility in employment services for persons with developmental disabilities.
Strategic decision--making in philanthropic giving and social investment requires good information about the potential and actual social benefits and impacts of that investment. But this information about social impact is hard to find and to generate. Methods for valuing social benefits are complicated, haphazard, and often unknown to most social investors and organizational leaders. This relative absence of standardized legitimized ways to document the social impact of philanthropic giving and social investments means that the complete, complex value of this work in advancing the public good is underappreciated.
Social Return on Investment Analysis
Nonprofit Management and Leadership, 2015
This article uses a social return on investment (SROI) methodology to analyze the social impact of a social enterprise offering a job and skills training program to an unemployed, largely female population. The social enterprise is based in Toronto (Canada) and run by a nonprofit agency dedicated to the advancement and empowerment of women, primarily immigrants, through access to employment. We focus our analysis on a job and skills training program that provides clients with the skills and tools that they need to successfully seek employment in their efforts to (re-)enter the Canadian labor market. Our goal is to determine the tangible and intangible program outcomes by applying and testing the SROI methodology. 2 Unemployment has severe consequences for individuals and families because it may lead to negative experiences of social exclusion (Schmid and Gazier 2002) and life in poverty (Gallie, Paugam, and Jacobs 2003). However, gaining access to the labor market can be extremely difficult for unemployed individuals, especially for certain marginalized subgroups such as women (International Labor Office 2010; O'Connor 2000) and first-generation immigrants (Zietsma 2007). For women, both individual factors, such as taking care of the family and child rearing, and structural factors, such as welfare state regulations, hinder their success in the labor market (Stier, Lewin-Epstein, and Braun 2001). Successfully accessing the labor market is even more challenging for female immigrants, especially women of color, leading to frustrating migration and job search experiences (Creese and Wiebe 2012; Tastsoglou and Preston 2012). For instance, first-generation immigrants face various discriminatory barriers to full integration into a host society. These barriers include, among others, adapting to a new language, difficulty accessing services, and the devaluation of existing skills and undervaluation of credentials from their countries of origin (Aydemir and Skuterud 2005; Handy and Greenspan 2009; Reitz 2001; Walk et al. 2014). Social enterprises-defined as organizations that aim to achieve a social goal by breaking even (or even making a profit) through the sale of services (Quarter, Ryan, and Chan 2015)-have been regarded as valuable organizational venues for mitigating social exclusion (Kerlin 2010), for example, through the provision of skill and employment training programs to unemployed individuals (Spear and Bidet 2005; Vidal 2005). Investment in skills-training services that target the development of job skills for immigrants and other marginalized groups can facilitate a successful integration into sustainable employment (Cohen-Goldner and Eckstein 2010). Skills-training programs have benefits beyond the acquisition of skills. For participants, these programs boost self-esteem and self-efficacy (Creed, Bloxsome, and Johnston 2001). For employers, they offer increased diversity in the workforce (Kirsh et al. 2010), and such programs create an improved sense of belonging to the community for participants
Author eBooks, 2015
This article uses a social return on investment (SROI) methodology to analyze the social impact of a social enterprise offering a job and skills training program to an unemployed, largely female population. The social enterprise is based in Toronto (Canada) and run by a nonprofit agency dedicated to the advancement and empowerment of women, primarily immigrants, through access to employment. We focus our analysis on a job and skills training program that provides clients with the skills and tools that they need to successfully seek employment in their efforts to (re-)enter the Canadian labor market. Our goal is to determine the tangible and intangible program outcomes by applying and testing the SROI methodology. 2 Unemployment has severe consequences for individuals and families because it may lead to negative experiences of social exclusion (Schmid and Gazier 2002) and life in poverty (Gallie, Paugam, and Jacobs 2003). However, gaining access to the labor market can be extremely difficult for unemployed individuals, especially for certain marginalized subgroups such as women (International Labor Office 2010; O'Connor 2000) and first-generation immigrants (Zietsma 2007). For women, both individual factors, such as taking care of the family and child rearing, and structural factors, such as welfare state regulations, hinder their success in the labor market (Stier, Lewin-Epstein, and Braun 2001). Successfully accessing the labor market is even more challenging for female immigrants, especially women of color, leading to frustrating migration and job search experiences (Creese and Wiebe 2012; Tastsoglou and Preston 2012). For instance, first-generation immigrants face various discriminatory barriers to full integration into a host society. These barriers include, among others, adapting to a new language, difficulty accessing services, and the devaluation of existing skills and undervaluation of credentials from their countries of origin (Aydemir and Skuterud 2005; Handy and Greenspan 2009; Reitz 2001; Walk et al. 2014). Social enterprises-defined as organizations that aim to achieve a social goal by breaking even (or even making a profit) through the sale of services (Quarter, Ryan, and Chan 2015)-have been regarded as valuable organizational venues for mitigating social exclusion (Kerlin 2010), for example, through the provision of skill and employment training programs to unemployed individuals (Spear and Bidet 2005; Vidal 2005). Investment in skills-training services that target the development of job skills for immigrants and other marginalized groups can facilitate a successful integration into sustainable employment (Cohen-Goldner and Eckstein 2010). Skills-training programs have benefits beyond the acquisition of skills. For participants, these programs boost self-esteem and self-efficacy (Creed, Bloxsome, and Johnston 2001). For employers, they offer increased diversity in the workforce (Kirsh et al. 2010), and such programs create an improved sense of belonging to the community for participants
Foreword Liam Byrne, Minister for the Cabinet Office and Kevin Brennan, Minister for the Third Sector Government wants to strengthen the already powerful impact of third sector organisations in our economy. We are also leading a new drive to transform our public services. 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 new guide to Social Return on Investment is timely, as it will help third sector organisations to communicate better their impact to customers, government and the public, through measuring social and environmental value with confidence, in a standardised way that is easy for all to understand. The guid...