titl EN PUBLIC PROJECT DESIGN AND EVALUATION 02_SROI analysis Gabriela Vaceková gabriela.vacekova@econ.muni.cz Headlines from your country: What happened around the world last week? Lecture content * Social return on investment (SROI) is a systematic way of incorporating social, environmental, economic and other values into decision-making processes. * Like traditional cost-benefit analysis (CBA), SROI includes a ratio; in this case a Social Return on Investment ratio. * The aspect of stakeholder perspectives is essential in the SROI approach. * This lecture covers the theory and practice of performing SROI analysis. PLEASE NOTE! •Social return on investment (SROI) is a principles-based method for measuring extra-financial value (i.e., environmental and social value not currently reflected in conventional financial accounts) relative to resources invested. * Third sector impact * The Third Sector Kitchen: preparing a dish for the common good * Everybody is talking about „impact“… a fuzzy term! (Social) Impact (Social) Value (Social) Return Outcome Output (Social) Effects Success Its all about success! What is success? * …the positive result of an effort * …the occurrence of an intended, desired outcome * …the result of economic activity, recorded or expressed in monetary terms * …completing an objective or reaching a goal * • * What does success mean in the case of public projects? What are Outputs? * Outputs are those products and services that directly result from the activities of an organization, project or program (and the related efforts). * Outputs can be controlled by the management in terms of their type and scale. * Outputs can often be measured more directely compared to impacts. They are often measured with indicators (KPI) – especially when a whole organisation is being assessed. CS Output = Success? * Are activities and their outputs the purpose of an organization? * If activities are only the means to an end: Is it enough to focus only on outputs in order to assess their success? * Is increase in output always essential? Does efficiency increase mean success? * To what extent do support processes contribute to the success? Preconditions for a successful performance? Own KPIs? * Does performance measurement really measure the dimensions which are central for the success of the organization? * * What is Outcome? * Outcomes refer to those changes (positive and/or negative) that are noted to the beneficiaries (people, groups, society) of an intervention, after an intervention has taken place. * Outcomes may occur short-term, medium-term and long-term * Outcomes may occur at micro-, meso- and macro-level * Outcomes may generally occur on six topical dimensions: - economic, ecological, social, cultural, political, psychical and physiological * Outcomes have to be measured, analysed and valued differently for each stakeholder * * CS Impact box Quelle: Schober, C./Rauscher O. (2014): „Was ist Impact? Gesellschaftliche Wirkungen von (Nonprofit) Organisationen. Von der Identifikation über die Bewertung bis zu unterschiedlichen Analyseformen.“, Working Paper, NPO&SE Kompetenzzentrum WU Wien. Download unter: https://www.wu.ac.at/fileadmin/wu/d/cc/npocompetence/downloads/impact_gesellschaftliche_wirkungen_v on_nonprofit_organisationen.pdf English version coming soon. Outcome = Success? * Outcomes have to be understood in broader terms than typical success dimensions * A comprehensive consideration of outcomes allows an overall assessment of organisations or programs/projects beyond the organisational success => Organisations can be successful in terms of efficiency/effectiveness but still have an overall negative outcome (Externalities) * Comprehensive impact analyses consider unintended outcomes Impact value chain/Logic Model Quelle: Schober, C./Rauscher O. (2014): „Was ist Impact? Gesellschaftliche Wirkungen von (Nonprofit) Organisationen. Von der Identifikation über die Bewertung bis zu unterschiedlichen Analyseformen.“, Working Paper, NPO&SE Kompetenzzentrum WU Wien. Download unter: https://www.wu.ac.at/fileadmin/wu/d/cc/npocompetence/downloads/impact_gesellschaftliche_wirkungen_v on_nonprofit_organisationen.pdf English version coming soon. OR Impact Model Input Activties Output Outcome minus Deadweight Impact Stakeholder A Stakeholder B … Stakeholder X Input Activties Output Outcome minus Deadweight Stakeholder A Stakeholder B … Stakeholder X Input Activties Output Outcome minus Deadweight Stakeholder A Stakeholder B … Stakeholder X OR Presentation of the results * The main results of the data-analysis are presented in a dashboard focusing on the four relevant sections. * Dashboards contain indicators that can be aggregated from project comparable results and recognizability throughout the whole project period CS “impact goals” a strategic target-performance scheme* TARGET Economic - - - - PERFORMANCE TARGET Political - - - - TARGET Cultural - - - - TARGET Social - - - - TARGET Ecological - - - - TARGET Mental and physical - - - - PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE * Developed by Rauscher, O./Schober, C. (2015): “Wirkungsanalyse”. In: Eschenbach et al.: Management der Nonprofit-Organisationen. Bewährte Instrumente im praktischen Einsatz. Schäffer-Pöschel Verlag, Stuttgart CS * SROI 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 gives a voice to stakeholders that have been excluded in the past, e.g. disabled workers in social firms and their families * SROI is based on standard accounting and commercial investment principles * SROI 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’ * SROI involves measuring change – what funders are really looking to invest in * • Inputs Outputs Outcomes Impacts For each stakeholder (e.g. disabled workers, their families, their community, their state support agencies, local employers and businesses 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 SROI project: Ethiopia – educational activities SROI projects: Ethiopia – start-ups SROI project: Ethiopia – new school SROI project: Ethiopia – impact assessment SROI project: Ethiopia – production of ovens * SROI project: Ethiopia – backyard gardening Vaceková et al., 2016 SROI calculations – group activity (excel) Discussion – limts and merits of SROI analysis Useful links: •Global Value Exchange Database: •http://www.globalvaluexchange.org/ • •NPC: •http://www.thinknpc.org/publications/mapping-outcomes-for-social-investment/ • •SIAA: •http://www.siaassociation.org/ • • •Thank you for your attention!