It’s fine to count the number of people coming through the door, or how many dollars are raised, but to find out if your organization is really having an impact, you have to start asking different questions.
Impact. ROI. Measure. Each word is linked to questions about value creation. And these questions are linked to the need for evidence that results have been achieved. These are necessary and important questions for internal teams to ask, as they also are when engaging with funders/investors and other external audiences.
Many nonprofits, charities, social enterprises and social businesses are beginning to explore the social return on investment (SROI) methodology as a framework to assist them to speak to impact, ROI and measurement. While still an emerging method, SROI can assist any organization to consider and present the value resulting from activities that influence the circumstances of stakeholders.
When exploring SROI as a framework, there are a few important things to consider. For example, does your organization have an evaluation system in place? If so, is your approach focused on describing activities and reporting on the quantity of participants, or is your approach geared toward measuring outcomes?
Until recently, many organizations were activity-based in their approach to evaluation, often at the request of their funder/investor. While it is important to demonstrate that activities are effective and well-subscribed, one challenge of activity-based evaluation is that audiences often struggle to see value beyond the cost of service provision. When cost is the only data point to inform a perspective on value, the perspective of the investor is typically the only one considered. In this case, the value of the change that is experienced by participants is overlooked, which means that the value assigned to the activity in question is under-represented.
Finding evidence of change
When an outcomes-based evaluation framework is in place, the evaluation system is designed to measure change. In our experience, change is synonymous with the words “outcome” and “impact”. In all three cases, (i.e. measuring change, measuring outcomes and measuring impact), the evaluation approach is structured such that “before” is compared with the “after” in relation to each participant either directly or indirectly influenced by the activity.
With an outcomes-based evaluation system in place, an organization can gather evidence of change. With evidence of change in hand, an SROI will help an organization to present the value of that change in financial terms that reflect the experience and perception of all stakeholders impacted. However, the SROI framework must be based upon the foundation of an outcomes-based evaluation.
Since 2009, SiMPACT has been supporting 88 projects selected to receive investment from the Safe Communities Innovation Fund (SCIF) as a result of each project’s innovative thinking around crime prevention and crime reduction. In order to receive SCIF funding, each project must commit to reporting evaluation results and then to incorporating evaluation results into an SROI over this three-year period.
SiMPACT’s work with SCIF projects has been focused on:
1) supporting each project to map out their SROI framework;
2) assisting each project to map out their outcomes framework; and
3) examining project evaluation tools to ensure that they are structured to provide evidence that outcomes have been achieved.
In order to fulfill their obligations to report, many SCIF projects have needed to shift from an activities-based evaluation to a new focus on measuring outcomes. In a recent evaluation of their training experience, participants commented on how the shift from a focus on activities to a focus on outcomes informed and improved the way projects were managed. Their feedback included:
1) Organizational improvement, i.e. changes to how activities are organized, how client follow-up is conducted, and assessment of client needs.
2) Increased clarity in program model, and changes clients experienced.
3) Improved comparison of pre and post data.
4) Improved internal communications among the project team
5) Improved external communications with current and potential funders/investors
So, as we strive to express impact, value ROI, and measure results, the foundation to answer our questions is whether something has changed. With a clear focus on change, an organization can present evidence of that change to interested audiences and stakeholders. Should they decide to take the next step and value that change, the organization has the foundation in place to benefit from a social return on investment analysis.
Stephanie Robertson founded SiMPACT Strategy Group in 2004 and launched LBG Canada in 2005. Through her career, Stephanie has led many diverse initiatives, including the creation of Generation 2000, the development of the SROI Primer educational tool and the SROI Canada Network. As the first accredited SROI practitioner in North America, Stephanie is a leading professional in the area of social impact management and measurement.