Why SROI?• Increasing recognition that we need better ways to account for the social, economic and environmental value that results from our activities.• Investors in activities want VfM and this includes the social value has been created.
Treasury VfM Definition “VfM is defined as the optimumcombination of whole-of-life costs and quality (or fitness of purpose) of the good or service to meet the user’srequirement. VfM is not the choice ofgoods or services based on the lowest cost bid.” HM Treasury (2006) Value for money guidance
What is SROI‘SROI is the application of a set of principleswithin a framework that is designed to helpbring about consistency, whilst at the same timerecognising that what is of value will be verydifferent for different people in differentsituations and cultures’new economics foundation
What is SROI?• Every day our actions and activities create and destroy value.• The value we create goes beyond what can be captured in financial terms.• SROI is a framework for measuring and accounting for a broader concept of value.• SROI measures change in ways that are relevant to the people or organisations that experience or contribute to it.
What does SROI do?• Tells the story of how change is being created by measuring social, environmental and economic outcomes and uses monetary values to represent them.• A ratio of benefits to costs is calculated• A ratio of 3:1 indicates that an investment of £1 delivers £3 of social value.
Types of SROI• Evaluative, which is conducted retrospectively and based on actual outcomes that have already taken place.• Forecast, which predicts how much social value will be created if the activities meet their intended outcomes.
Developing a theory of change Inputs Activities Outputs OutcomesOutput: Tells you an activity has taken place and isusually quantitative (e.g. Number of people trained).Outcome: The change that occurs as a result of anactivity (improved wellbeing of training participants).
Context to the Intervention These are the wider economic, social, environmental, and policy conditions. This is very important – many logic models suggest that interventions take place in a vacuum, failing to take account of the way these factors have an influence. Rationale for Intervention This is the justification for the selected intervention, e.g.: what is the nature and scale of the specific problem being addressed? What will happen if we ‘do nothing’? Why this intervention and not alternatives? Inputs Activities & Outputs Short-term Medium-term Long-term These are the These are the things Outcomes Outcomes Impactsresources available to that an intervention It is often useful to Medium-term This is the final, high- deliver the does, e.g. provide distinguish between outcomes are level effect of the intervention. workshops, practical short- and medium- changes in behaviour intervention – e.g. support, training etc. term outcomes. or condition – e.g. ‘Improved lifeThis may be in terms ‘beneficiaries expectancy, reduced of specific cash Outputs are Short-term outcomes increase levels of health inequalities’. funding or ‘in-kind’ quantitative can be defined as physical activity’ contributions. measures of this changes in knowledge This relates closely to activity, e.g. No.s of: / awareness / attitude In describing any the original rationale It is relatively outcomes, languagestraightforward to put • Beneficiaries – e.g. ‘beneficiaries for intervention. •Materials distributed have an increased suggesting change a monetary value on (‘increased, reduced’) Impacts are subject to inputs and, in a • Sessions held awareness of ...’ a very wide range of is useful. framework of costs Evaluation at this This is based on a other contextual simple model of Evaluation here is and benefits, inputs level concerns influences (e.g. behavioral about effectiveness. are the costs. implementation and combinations of other change, which The relationship Evaluation at this efficiency (the policies, programmes, suggests that these between inputs and level is about relationships between economic changes precede outcomes is the basis economy and the inputs and outputs). conditions), - shown changes in behaviour for cost-effectivenessresources consumed. by the very or condition. / cost-benefit studies. permeable line
ExampleStakeholder Input Activity Output OutcomeParticipants Time Trained in computer Number of hrs Increased self recycling engaged confidence Level of IT skills Sustainable employmentParticipants Time Encourage family Number of hours Better family lifefamilies member family member is Increased income engaged for familyLocal N/A N/A No of computers Reduced landfillgovernment recycled and diverted expenditure from landfillThe N/A N/A Carbon dioxide Contributionenvironment emissions towards climate changeState N/A N/A Reduction ins health Less usage of NHS services used care Less expenditure on benefits
Evidencing outcomes• SROI evaluates material outcomes for all stakeholders and not just outputs or those outcomes that are easy to measure.• Find out what is important, then seek to measure it (this involves engaging stakeholders).Key question: “how do we know that changehas taken place?”
Evidencing outcomes• Select ‘ways of knowing’ that an outcome (a change) has taken place = indicators Stakeholder Outcomes Indicators Long term unemployed Person (A) finds (A) Accepts a job offer person sustainable and (A) Stays in meaningful employment for at employment least 6 months (A) Self reports on job satisfaction
Evidencing Outcomes• Objective indicators e.g. No. occurrences of staff sick leave• Subjective indicators e.g. Self reporting physical health• Direct measurement e.g. Cost saving
The stages of SROI1. Establishing scope and identifying key stakeholders2. Mapping outcomes (shows relationships between inputs, outputs and outcomes)3. Evidencing outcomes and giving them a value4. Establishing impact5. Calculating the SROI6. Reporting, using and embedding
SROI can help improve services by:• Facilitating strategic discussions and helping you understand and maximise the social value an activity creates• Helping you target appropriate resources• Demonstrating the importance of working people and organisations that have a contribution to make in creating change• Creating a formal dialogue with stakeholders that enables them to hold the service to account and involves them meaningfully in service design.• Identifying common ground between what organisation wants to achieve and what stakeholders want to achieve
SROI can improve sustainability by:• raising our profile;• improving our case for further funding;• making our tenders more persuasive.
Questions for Settlement?• Forecast or evaluative SROI?• How are we doing gathering output, outcomes, and impact data?• In house or external support for SROI?• If in house who would be involved?• Are their sufficient resources for in house SROI?• Skills needed for SROI: accounts, finance, evaluation & stakeholder involvement