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Measuring impact Size of the sector Social Return on Investment (SROI)

Measuring impact Size of the sector Social Return on Investment (SROI). Prof Stephen McKay Dr Domenico Moro. Size of the sector. Workforce Link with NCVO (almanac) and Skills Third Sector Volunteering Giving. Workforce – LFS. A concentrated sector. In 4 main industries:

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Measuring impact Size of the sector Social Return on Investment (SROI)

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  1. Measuring impactSize of the sectorSocial Return on Investment (SROI) Prof Stephen McKay Dr Domenico Moro

  2. Size of the sector • Workforce Link with NCVO (almanac) and Skills Third Sector • Volunteering • Giving

  3. Workforce – LFS

  4. 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)

  5. 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)

  6. Measuring impact Several different tools and approaches • Social ‘Cost Benefit Analysis’ • SROI • SROI is an adjusted cost benefit analysis • Emphasises the role of stakeholders • Designed/developed for the Third Sector

  7. 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

  8. 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)

  9. 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

  10. 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’

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