Along with my colleague Steven Fox, I have recently undertaken training with nef Cons
ulting to allow us to provide support on SROI, but what is it all about?
There is a lot of talk about measuring 'return on investment' and service commissioners are looking at using SROI as part of the commissioning process, so it is becoming an important issue for any organisation who wants to either receive funding or have a chance of winning contracts with bodies such as Local Authorities.
This is because SROI demonstrates the value for money of the services you are providing to ensure that any investment, through grants or contracts, will be positive if not significant.
But SROI is more than just a measurement of a financial ratio - £x in : £y out; it also provides a valuable tool for determining how well an organisation is operating, it offers an insight into the outside world's perception of what you are doing, and provides an opportunity to step back and consider what you are achieving and the validity of the activities you undertake.
This is achieved through:
- Improved programme management
- More effective planning
- More effective evaluation
- Increased understanding of the impact of your work
- Stronger communication of the value of your work to ‘the people that matter’ (internal and external stakeholders)
- Enhanced attention to the social, economic and environmental value created by your business or organisation
SROI can be either evaluative, looking at previous achievements and demonstrating the worth of the activities undertaken, or forecast which predicts how much social value will be created if your activities meet their intended outcomes.
SROI was developed from social accounting and cost benefit analysis and based on the following seven principles:
- Involve stakeholders
- understand what changes
- Only include what matters
- Only include what is material
- Do not over-claim
- Be transparent
- Verify the result
It is well worth you considering using SROI as part of the evaluation of your services and certainly when planning future activities. You could look at including it as part of your annual report/review to provide a recognised and verifiable way of recording and reporting the impact of your work and the outcomes you have achieved.
SROI is not something to take lightly as it requires commitment and an investment of time and, if you bring in outside support, money. However, it will give you a clear statement of what you are trying to achieve and the benefit that your service has for your clients, stakeholders and the wider community. It can be invaluable in both developing your organisation and publicising the impact you are having.
You can find more information at the SROI Network website:
http://www.thesroinetwork.org where you can find the Cabinate Office of the Third Sector Guide to SROI.
Or give me a call on 0191 6450010, I would be more than happy to discuss how SROI can be of benefit and advise on how to introduce it to your organisation.
SROI: Measuring Value, Impact and Value for Money
