Measuring Social Return
The Scottish Government is pleased to announce that a project to develop, promote and support the use of a standard form for measuring social return on investment (SROI) is now underway. SROI is a way in which an organisation can look at what it does, measure the difference that activity makes to people's lives, and tell a robust story about that difference or impact. It uses financial comparators or 'proxies' to report on the impact made.
The project will be run by a consortium led by Forth Sector and SROI UK, with sub-contractors Haldane Associates, the Association for Chief Officers of Scottish Voluntary Organisations (ACOSVO), the Social Enterprise Academy (SEA), the Social Audit Network (SAN), the new economics foundation (nef), New Philanthropy Capital (NPC) and Charities Evaluation Services (CES). It will be taken forward between 2009-2011 and aims to:
- develop widespread awareness and knowledge of SROI among third sector organisations, funders, commissioners and accounting bodies;
- promote the increasing adoption, acceptance and use of SROI as a reporting method by third sector organisations;
- support increasing numbers to have the ability and understanding to take forward SROI on their own behalf;
- enable third sector organisations to demonstrate their impact clearly;
- assist funders and commissioners to make more intelligent investment or purchasing decisions;
- increase the accessibility of SROI for all parties; and
- ensure that the SROI methodology is robust, while taking on board the best of other impact measurement methodologies, such as social accounting.
The commitment to develop the measurement of social return was made within the Enterprising Third Sector Action Plan, published by the Scottish Government in June 2008. Included within the project is a major engagement programme, with seminars, workshops, pilot studies and informational articles, as well as the production of an interactive website, indicator bank and training programme.
Enterprise Minister Jim Mather said:
"The Scottish Government highly values the contribution of the Third Sector to increasing sustainable economic growth in Scotland. The SROI project will complement the action we are taking - by increasing funding by 37 per cent and publishing an Enterprising Third Sector Action Plan - to help the sector become increasingly enterprising. This project will be a valuable tool in demonstrating the effectiveness of the Third Sector and the positive impact it can have on the lives of people around Scotland".
The project is being run alongside a complementary project which commenced in November 2008, and is being funded by the Office of the Third Sector (OTS) within the Cabinet Office. OTS's project will, in particular, have responsibility for the standardisation of the approach to using SROI, and the production of guidance on that basis.
Background
Over recent years, the third sector has been growing, concurrently with demand for the services and additional value it provides. In this context, it is becoming increasingly important to find tools with which the impact of third sector work can be valuated, measured and proven. A range of tools is available, of which two have become increasingly significant over recent years: Social Return on Investment (SROI) and Social Auditing and Accounting (SAA).
In 2005, a European-funded EQUAL project with match funding from the Scottish Government commissioned Forth Sector Development to take forward a pilot project on SROI, resulting in the report Investing in Impact, published in 2007. The report concluded that SROI could be a valuable tool to assist the third sector in measuring and demonstrating its own value and impact, but suggested that more needed to be done to improve time and resource efficiency and accessibility. On that basis, and in the context of increasing interest in SROI from across the sector and throughout the UK, the Scottish Government has chosen to support and improve SROI within the current project.
What is SROI?
SROI is an impact measurement tool which looks at the complete story of an organisation's outcomes using a combination of narrative, qualitative and financial measures.
It provides a financial proxy value of the impact made by an organisation or programme, which can be understood alongside traditional financial costs. It is transparent and consistent and aims to demonstrate the social value of activities in a tangible way that everyone can understand.
Who's involved?
The consortium running the project is led by Forth Sector and SROI UK, with sub-contractors Haldane Associates, the Association for Chief Officers of Scottish Voluntary Organisations (ACOSVO), the Social Enterprise Academy (SEA), the Social Audit Network (SAN), the new economics foundation (nef), New Philanthropy Capital (NPC) and Charities Evaluation Services (CES).
The Third Sector Division will be chairing an advisory group, involving government officials, key intermediaries, funders and third sector organisations. The group will give feedback on the project's outputs as they go forward, to ensure that these meet the needs of all stakeholders.
The contractor will maintain a list of people and organisations who wish to be kept informed on the project's progress, and of upcoming events, seminars and training. If you would like to be kept updated and attend SROI events then please email penny.morriss@forthsector.org.uk.