Social Return on Investment (SROI) - a framework for Benefits Management
Measuring impact Size of the sector Social Return on Investment (SROI)
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Measuring impactSize of the sectorSocial Return on Investment (SROI)
Prof Stephen McKay Dr Domenico Moro
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Size of the sector
1. WorkforceLink with NCVO (almanac) and Skills Third Sector
2. Volunteering3. Giving
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Workforce – LFS
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A concentrated sector• In 4 main industries:– Health, social work, education and real estate cover
93.5% of VCS employment• 68% female (45% for all workers)• Average 43.4 years old (40.8)• Average 30 hours a week (34)• 38% are graduates (26%)• 22% in unions (public sector 56%, private 14%)• 40% part-time (10%, unable to find a FT jobs)
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Volunteering and giving[2008-09 (E+W) Last 4 weeks]
Informal help 62%; formal volunteering 41%; employment volunteering 5%
75% had given to charity, with average donation of £25 (median £10)
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Measuring impact
Several different tools and approaches1. Social ‘Cost Benefit Analysis’2. SROI• SROI is an adjusted cost benefit analysis• Emphasises the role of stakeholders • Designed/developed for the Third Sector
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Social Cost Benefit Analysis (CBA)
• Form of economic analysis to compare costs and benefits, over time;
• Need to express costs and benefits in current monetary terms;– Tangible and intangible costs and benefit• Different methodologies used to measure intangible
costs and benefits
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SROI vs CBA
• As with CBA, SROI combines in the form of a cash flow, the ratio of (discounted) costs and benefits over a certain period of time;
• In many SROI evaluations– Many costs are tangible;– Many “social” benefits are intangible (and are often
given high valuations, and hence a high overall return);• Do not represent any actual financial savings (which would be
closer to marginal rather than average costs)
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Distinctive TSO features
• Inputs include volunteering– Valuing volunteering activity• SROI often uses a market value approach (minimum
wage, average wage)
• Outputs/Outcome– Quality of service provided– Empowerment of service users
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Using and reporting SROI
• Temptation to use SROI for comparing organisations despite warnings– By organisations themselves – marketing strategy– By funders and commissioners
• Risk of how others interpret the findings– Over-emphasis on the ratio– Organisations feel exposed and vulnerable
• SROI process unaffordable for many, as increasingly ‘professionalised’