What is Social Return on Investment?
As part of a full evaluation of the Yorkshire Coast Community Led Local Development (CLLD) programme we are undertaking an analysis of the Social Return on Investment (SROI). Social Return on Investment is acknowledged in HM Treasury Green Book as an effective means of assessing impact. The SROI process involves identifying a financial proxy for an outcome, which enables a value to be ascribed to the impact it has delivered. SROI methods calculate a figure for the value created per £1 spent.
We are using the Social Value Engine to calculate SROI. This tool was developed jointly by East Riding of Yorkshire Council and Rose Regeneration and it is accredited by Social Value UK. The Social Value Engine contains over 200 financial proxies, which can be used to quantify the value of an outcome. Each outcome is referenced against one of the eight domains in the Bristol Accord, which is a means of assessing the relative sustainability of a place. This means that when the social values of an intervention are calculated they can be described not just in terms of a financial value but also in terms of their impact on the relative sustainability of the community in which they are located.
To calculate the value of the programme as a whole we are looking at every project for each year of its duration. We are also assessing the social value that the programme processes and structures provided over and above the collective value of its projects. For instance through providing opportunities for more collaborative working, or working to build community capacity.
The diagram below explains the origins of the Bristol Accord and the way it defines a sustainable community (click the image to enlarge):
The assessment of social impact must follow a number of steps these are:
- Establishing the scope of the analysis – the project activities and geographical area covered
- Working with those who have been involved to make sure that the assumptions made have been agreed by everyone
- Evidencing the outcomes and the value – through data and information collected during the programme
- Taking account of factors that influence the intensity of the project outcomes (eg what might have happened anyway?). We call these factors deflators
- Calculating the Social Return on Investment (SROI) by dividing the value of the outcomes by the cost of delivering them
- Reporting the findings
To enable us to follow this assessment process each project is collating evidence using direct discussions with beneficiaries plus relevant documentary sources, depending on their beneficiary groups and other stakeholders.
The five deflators are:
- Leakage – How much of an outcome might have delivered an impact outside of the area you intended. Place based measures of impact are often reported to organisations with a specific territorial focus it is useful to have a measure of the geographical span of the impact achieved
- Deadweight – How much of the outcome might have been achieved without intervention
- Attribution – What proportion of an outcome might be attributed to others because their activity contributed to it
- Drop-Off – What proportion of the outcome will diminish over time
- Displacement – An assessment of how much of the outcome has displaced other outcomes.
Two other key tests, which need to be applied following community consultation are important in coming to an assessment of impact. These are:
- Materiality – which involves forming a judgement about how important in relative terms each impact identified is and choosing to measure only those impacts that make a material difference
- Sensitivity – considering the range of impacts identified and choosing to include only those that effectively cover the achievements of the projects and programme, removing very small impacts and adjusting the reporting of results to isolate any impacts that are disproportionately large compared to the other impacts identified
Outputs and Results
Each project has been assessed in terms of SROI at the end of its first project year. This assessment was an estimate for most projects. This means it was based on discussions with providers rather than direct participant data. For projects that have not yet reached the end of their first year SROI forecasts have been produced.
Social value calculations are reviewed by the CLLD Management Team to ensure the values achieved feel realistic in our local context. We have appointed Rose Regeneration as our external evaluator, part of the support they provide is verification of our social value calculations. This involves checking and challenging samples of project assessments at regular intervals to ensure underlying assumptions are based on sound rationale.
This assessment and verification process is an ongoing one. For year 2 the SROI calculations for each project will be based on actual data and evidence.
For more information on the SVE please click here
For more information on each project please click here
For more information on the projects SROI please click here