Social Return on Investment - SROI
How can we capture the value of housing and support services?
Financial accounting, such as Cap Gemini cost and benefit methodology, is powerful to demonstrate the potential savings achieved by investing in preventative services but used on its own, it falls short toe explain some crucial ‘social’ factors, such as which outcomes clients value the most, how these align to strategic interests of commissioners, why families appreciate the support offered at times of crisis, and how the actions taken at supported housing setting impact the local economy, and so forth. These broader values, which may appear less tangible and equally awkward to measure, are social values, need to be evaluated as complimentary to financial analysis, so that decisions to fund a specific part or parts of a service are informed not only by savings but by social value created and added.
Social Return of Investment (SROI) is a framework for measuring and accounting for this much broader concept of value. It measures change in ways that are relevant to the people or organisation that experience or contribute to it. It tells the story of how change is being created by measuring individual, social/community-based and economic outcomes and uses monetary values to represent them. This enables a ratio of benefits to costs to be calculated and like cost and benefit analysis, the ratio does not represent a cashable return. In other words, the ratio is about value created, rather than the money. For instance, a ratio of 10:1 indicates each £1 delivers £10 value, and that £10 is a culmination of actual cost of alternative services identified by stakeholders or experts in the field.
SROI is helpful in facilitating strategic discussions to ensure the social value HRS creates is maximised. It does by demonstrating target areas where small investments can make big impact or adjusting resources to manage negative unintended consequences of a service. This method forms a basis for a dialogue with individuals who use services and carers, and make sure that services are built around not only their needs, but their aspirations and values -what really matters to them.
SROI was developed from social accounting and cost and benefit analysis and is based on seven principles. These principles are:
- Involve stakeholders
- Understand what changes.
- Value the things that matter.
- Only include what is material.
- Do not over-claim.
- Be transparent.
- Verify the result
Sitra has in-house expertise to help you identify and measure the social value of your services, and demonstrate your impact on wider society. To discuss how value for money analysis might help you take strategic decisions, email firstname.lastname@example.org or ring 02077934729.