This week I had the opportunity to undertake training on Social Return on Investment (SROI). Part of the SROI Network’s vision is for a world in which decisions take account of social and environmental returns as well as financial returns. The Network defines SROI as an approach to understanding and managing the value of the social, economic and environmental outcomes created by an activity or an organisation. SROI aims to increase social equality, environmental sustainability and wellbeing.
Below are my learnings and reflections from my first introduction into SROI.
Undertaking a complete Social Return on Investment analysis is very much about following a defined set of principles to ensure that all of the flow on effects of an activity are captured. You are not able to pick and choose which outcomes you measure, for whom and over what timeframe. What you measure is informed by your stakeholder engagement: your outcomes may be intended, unintended, positive or negative; they may be impacting on your target client group or a stakeholder group you did not expect to be impacted. This breadth of analysis is one of the strengths of SROI. It is also a daunting prospect when being first introduced to the framework.
Having recently attended, on behalf of the Queensland Council of Social Service, many of our workshops on ‘Measuring Outcomes using Results Based AccountabilityTM’, I found the differences between the two approaches challenging. Luckily I found this blog which explores the differences between the two approaches.
My thoughts at this stage are that there is no one size fits all answer to which is ‘better’. The framework to use for determining and measuring outcomes will depend on why you are seeking to do so, who you are wanting to communicate the information to, your resource constraints and where you are on your journey towards measuring outcomes.
As the training drew to a close our group naturally arrived at an inevitable discussion about the risks of focusing only on a SROI ratio. Decisions should not be made on a number alone and it would not be fair to compare one intervention’s ratio to another’s without having a full understanding of the other differences between the two activities. It is thus important to ensure the analysis and narrative that supports a ratio is presented well.
The SROI guide also explores this point and encourages organisations to endeavour to educate funders and investors on the importance of putting the ratio in the context of the overall analysis.
It is also important to see value not just in the ratio, but in the process itself, which can give deeper insight into the value created - or not created - by current activities and can be an exciting mechanism for generating ideas, considering alternatives and fostering innovation.
Regardless of the tool chosen to meet your needs, the ability to articulate value socially and environmentally and the impact on our communities overall should be integral to future decision making along with any economic rationale (See our previous BLOG ‘Why Measure Outcomes’).