The increasing interest in using Social Return on Investment (SROI) as a way to understand and communicate the value that is created by an organization or program has led to important conversations among those who are passionate about creating change in their communities. Government ministries, foundations and corporate sponsors are looking for the social return on their investment to share with the public, donors and shareholders.
Non-profit organizations are seeking to share their outcomes with vulnerable people and the community in order to understand the scope of their impact and to make their work appealing to potential funders.
With so many parties using Social Return on Investment, a couple of challenges have emerged.
The trap of comparison
As organizations embark on valuing the impact they are creating, there is the temptation to wonder how their SROI ratio will compare with other organizations in their sector or region. However, the ratio in absence of the story of change is a meaningless piece of information and only one factor in understanding value created. Social agencies are not the only ones guilty of sliding into this trap.
The seemingly objective information provided by an SROI ratio is also attractive to funders who ask, “Can I use this to pick the best organization to invest in?”
Why can’t we compare ratios?
Results of an SROI analysis for seemingly identical programs could vary because of a number of factors, including geographical region, the positioning of a program in terms of prevention or intervention, how participants are screened, and the organizational context in which the program takes place.
Geographical location. If identical programs are implemented in two different geographical locations, the value created could vary based on access to resources. For example, programs in rural and remote communities may get a higher ratio than those in urban centres because the services are more expensive to run, and therefore, a greater cost for re-allocating value would be considered in the SROI calculation. This does not mean that the program is more effective at achieving outcomes, or that the individuals it serves are at greater risk, but could merely be a reflection of the value of services in that area.
Timing of the intervention for participants. A program that targets a specific group of individuals who are at high risk of becoming deeply entrenched in a negative spiral will have a very different ratio than a program that targets individuals who have already become entrenched. SROIs on four different programs facilitated by one organization that supports individuals experiencing homelessness across a continuum provide a great example of this point.
The program that addressed youth homelessness created the most social value compared to the program that supported adults who experienced chronic homelessness. This is because of the greater potential for youth to change the trajectory of their lives. Although prevention of negative human experience creates a great deal of value for those who experience the change and for broader communities, interventions that support those who are already struggling continue to be of great concern. More importantly, addressing all of these issues is of value to Canadian society.
Participant selection. Some programs are focused on intervening with a select group of individuals who fit particular criteria, whereas other programs are broader in nature. For example, an SROI was completed on a sexual and relational health program targeted at grade nine boys in the public school system. Program participation is voluntary and the only requirement is that the boys show up and participate respectfully.
An alternative program design is to target young men who have already demonstrated to be at risk of involvement in unhealthy relationships. This design would likely have a higher ratio, but by virtue of its intake criteria, may exclude those who would benefit from intervention but did not meet the admission criteria. Both programs benefit people in need of intervention, but have different ways of creating value.
Organizational Health. A high ratio may be a reflection of an effective program that is creating value, but it can also be indicative of an investment that is too low to support the sustainability of a program or organization. It is not uncommon for staff in the non-profit sector to be driven by a strong passion for the work they do.
In a social and political climate where there is more need than resources, staff and volunteers can overextend themselves leading to impressive outcomes in the short term but high rates of staff turnover as time goes on, resulting in lower ratios over the long term. Staff turnover may also impact the ratio of programs, as resources are funnelled from program delivery into training new staff. Once again, it is the story of change behind the numbers that tells the true tale of an SROI.
The bigger picture
Using the SROI methodology requires consultation with stakeholders (people and groups who experience change as a result of the program), a solid understanding of the social and political context, and the organizational culture that makes the program tick. The value that surfaces through this process is specific to the program in the community it serves and will be reflected in both the story and ratio of the SROI.
The risk in focusing on the ratio alone is only one part of the bigger story that needs to be told to progress our understanding of how these changes are created. What will you say the next time you are asked what your social return is?
Jenny Ofrim is an SROI & Evaluation Consultant at SiMPACT Strategy Group in Calgary, Alberta and is an Accredited SROI Practitioner. She can be contacted at firstname.lastname@example.org.