What is SROI and what does it do?

[Rachel Tonkin]

Hello,

 

I wanted to raise the issue of social return on investment (SROI) as it is something that is rising in prominence among both the charity sector and government, and also across the world. In short it is a way of measuring outcomes that aren't always easy to measure, and representing the outcomes within an economic framework. Most of the talk about SROI is around getting charities to use it to measure what they do and therefore be able to attract funding etc. But I think there is wider scope for this, firstly to get all sectors - voluntary, public and private - to use it, and secondly as an additional way to measure national profit (social profit that is). The UK government is already looking into it (more about that in the Demos report linked below) and there is work going on in France around this too by the Commission on the measurement of economic performance and social progress which states,

"Its aim is to identify the limits of GDP as an indicator of economic performance and social progress, to consider additional information required for the production of a more relevant picture, to discuss how to present this information in the most appropriate way, and to check the feasibility of measurement tools proposed by the Commission." (http://www.stiglitz-sen-fitoussi.fr/en/index.htm)

 

There seems to be something similar going on in Butan wehre they measure 'Gross National Happiness' - http://www.idrc.ca/en/ev-61364-201-1-DO_TOPIC.html - although the reason's behind it are slightly different.

 

So my thoughts are that i would firstly like to see something like SROI introduced as an alternative way to measure 'social' profit, important for charities but also for private companies as a way of encouraging them to be more socially profitable. I would like to see schemes like a company allowing their staff to give up a certain number of hours a year to do something that gives back to society, and companies can be measured and show the public how socially profitable they are. This could also be done in terms of donating office space to other schemes, providing a certain amount of free training for people, perhaps charities, or community schemes (eg IT courses), it could be volunteering in a local library, sponsoring a teacher etc. This would all work better with the policy to reduce the working week we agreed on at our first cabinet meeting, creating jobs that are better for society (someone recently termed this 'family-shaped jobs' and I might write more about that in a different discussion).

 

I had envisaged a while ago a sort of stock market for charities (to help funders/supporters know more about how socially profitable they are) but i think that idea would work well in terms of showing how socially profitable companies are, allowing the public to see this, and encouraging companies to compete and be innovative around not just monetary profit but also social.

 

Secondly - I'd like the UK to work towards measuring our Gross National Happiness, although i think the term well-being is better and more widely accepted. There is probably a way you could work this out from the results of SROI, in the same way we work out GDP - buy I'm no economist!

 

That's all, please do add your thoughts, have a look at the resouces..

 

 

Further resources

 

http://www.sroiproject.org.uk/

 

http://www.demos.co.uk/publications/measuring-social-value

[Monica Hall]

This is something I am really interested in developing in education. In 2004 Value added league tables were introduced and it was considered a more insightful way to measure students achievements rather than through the traditional performance league tables - when the results were released it showed many children would gain high results but would have not really moved on or progressed or been pushed to achieve more or in other words really learnt anything that they didn't already know!!! What was surprising was that girls dominated the value added league tables which lead to lots of debates as to whether or not girls where favoured more by teachers or whether girls were better learners. Any ways, moving away from the educational viewpoint.

I have recently noticed that banks are enabling their workers to support local projects via volunteering, BT has started running community projects around communication with schools.... it would be good to see more companies taking on this idea at a greater speed but it is fantastic to see some moving towards acknowledging social responsibilities albeit at a tardigrade pace.

I think it would be interesting to see how we could actually begin to make inroad into changing the mindset focused on performance and focus on the progression or the journey - I am not saying measuring UK in terms of SROI and wellbeing is a better solution and should replace the current working out via GDP but it would be enlightening to have alternative measures run alongside the current systems to give a more 3D picture.

That’s my thoughts not offered as a panacea just as an idea!