Introduction to Social Return on Investment Sheila Durie Chair SROI Network

Why Social Return on Investment? It is based on standard accounting and commercial investment principles as well as standard evaluation methods It makes sense to funders as a way of representing the value created by an activity and helps communicate of the value of the work to ‘the people that matter’ It involves measuring change –what funders are really looking to invest in It helps us explore how we make a difference and whether we could create more value It includes all stakeholders in an activity It describes the VALUES of changes to stakeholders by using financial proxies to represent values not usually captured in a market economy – social, community and environmental benefits

SROI = a ratio of investment to social return + a full report detailing the STORY of CHANGE for your activity

Principles and Framework The GUIDE to SROI

The SROI guide ukwww.thesroinetwork.org. uk

Understand what changes Value the things that matter Only include what is material

Do not over claim Be transparent Verify the result

Framework - The stages in SROI 1 Establishing scope and identifying key stakeholders. 2 Mapping inputs, activities, outputs and outcomes. 3 Evidencing outcomes and giving them a value. 4 Establishing impact. 5 Calculating the SROI Ratio. 6 Reporting, using and embedding.

Inputs OutputsOutcomesImpacts For each stakeholder (e.g. disabled workers, their families, their community, their state support agencies, local community etc.) we look at: Inputs - resources invested in the activity Outputs – the description of the activity e.g. 20 disabled people employed Outcomes - changes to people resulting from the activity, i.e., a new job, increased income, improved stability in life, improved quality of life Indicators of change – how do we know change has happened Quantities of change – how many of the stakeholder group experience change Financial proxies – how we value the change Impact = Quantities times proxies, less reductions to reflect that some change happens anyway and some change is created by other factors Theory of Change How does impact mapping work?

Case Study 6 Mary’s Place Guest House is a social firm offering 3 Star guest house accommodation to tourists and business travellers to Edinburgh.

Case Study 6 Mary’s employs or provides placements for people living with mental health issues and supports them back into mainstream employment, education, training, etc

6 Mary’s Place SROI Report - extract The analysis shows benefits to key stakeholders: savings to mental health and support services in Edinburgh of over £420,000 per annum; and savings on welfare benefits and gains in employment income and tax income of almost £50,000 per annum. Social added value per participant is almost £25,000 per annum, for an investment of £3,500. This report demonstrates that for the period under study, for every £1 invested in 6 Mary’s Place Guest House, almost £6 is returned in social added value. SROI Ratio = 1:6