To monetise or not?

A lot of you get in touch asking about Social Return on Investment (SROI) and putting monetary values to your impact.

Now I love SROI and would happily sit and calculate the numbers for your SROI, but, and it’s a big BUT, SROI is not suitable for everyone and not every organisation needs to calculate their SROI.

There are specific circumstances where it's better to use this type of approach.

Should I use SROI?

Here’s a quick decision tree for you to use to see if SROI is right for your organisation:?

And here’s an explanation of these questions:

1.??????What activities and outcomes do you deliver??

If you’re mainly delivering health and social care (including wellbeing outcomes), employability, skills and training, or criminal justice/offender management services then it’s worth looking at SROI as there are lots of existing financial values for these types of outcomes.?There are some other areas that also have financial proxies, such as environment which are mainly carbon and energy savings, but these tend to be more limited.?You can of course still do SROI and use techniques such as the Value Game to get your clients to assign monetary values to the outcomes achieved.?

2.??????Where does your income come from?

If your income is mainly from the public sector it’s worth considering SROI as you can identify potential savings for the public sector, whereas if your income is mainly from grants or donations from Trusts and Foundations or individual consumers or businesses they’re unlikely to be interested in SROI.?They will be much more interested in the stories, case studies and feedback (basically your qualitative data).

3.??????Are either your activities or your main sources of income likely to change in future??

If your plan is to do more work in any of the areas mentioned above or to have more income from public sector contracts SROI would be worth considering in the future.?Your other option is to do a predictive SROI – identifying the SROI your future activities will deliver rather than an evaluative SROI (which looks at the SROI your activities have already delivered).

Of course, it’s not always that straightforward and simple in real life so if you’re still unsure if SROI is suitable/worth doing do get in touch.

A word of caution

The real value with assigning financial values to the impact that you have is that it makes it quite simple for people to understand. So, you know your SROI is ￡6 for every ￡1 you spend on your services. So it very much simplifies everything you do down to one number. But the issue with that is that you then lose all the story and the depth of what you've actually delivered. Which is why, although I do love SROI, I'm very much for having a balanced approach between the two where you have the financial numbers where they're appropriate, but you still tell the story of what's actually happened in terms of your impact.?You’ll also appeal to people that love numbers and those that love words as you’ll have a mix of both.

#SROI #ImpactMeasurement