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Most charities 'are not able to measure social return on investment'
By David Ainsworth, Third Sector Online, 5 July 2010
Few have the data or expertise, says Demos report
Most charities still have a long way to go before they can measure their effectiveness using social return on investment and should be set more achievable benchmarks, according to a new report from think tank Demos.Measuring Social Value: The Gap Between Policy and Practice reviewed 30 charities and social enterprises of different sizes and in different sectors. It found that most did not have the data or the expertise to measure their outcomes in the depth required by SROI, which attempts to measure social impact in financial terms.
The report says the sector should instead be examined using simpler measures of social effectiveness.
Dan Leighton, a senior researcher at Demos and one of the authors of the report, told Third Sector that movement was needed from both the government and the third sector to create an effective environment for social measurement.
"The government likes SROI because it has the ability to create monetary values for social outcomes," he said. "But it is complicated and burdensome for charities."
He said the sector would need to recognise that some measurement was necessary and develop effective metrics to measure its outputs. But he said the government would have to realise it was unrealistic to apply the "gold standard" of SROI to many organisations.
He said that SROI remained a potentially useful goal for both sides to work towards in the future.
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Brian Craven, 5 July 2010, 11:39
If SROI is going to be used as a tool to measure social outcome, it is NOT just abopuit charities and SE's. It IS about every organisation that delivers or potentially could deliver SROI.
Frankly, there are few it doesn't cover.
Start with the public sector and then, the SE's and charities that wish to bid, can compete on a level playing field.
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Liam Barrington-Bush, 5 July 2010, 14:50
The problem w/ SROI is precisely that it DOES try to measure complex social problems in financial terms, which devalues the impact of a young person who has been able to safely leave a gang, a woman who has left an abusive relationship or a person who experiences depression who has been able to hold down a job.
Each of these impacts is vastly more beneficial to us than any financial measure could begin to dictate, yet as we spend more-and-more of our times in organisations trying to see these issues in financial terms, our focus is often pulled from the issues themselves, and how we can convert them into pound signs.
We need a new approach... feel free to check my thoughts on this here: http://www.concretesolutions.org.uk/?p=437
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Richard Morris, 5 July 2010, 16:12
I am trustee of East Herts YMCA and we are trying to incorporate some aspect of SROI into all our projects. In some cases, this can be quantified by money but more often it is better to consider social outcomes. We have found the process has triggered excellent discussions on perceived, actual and measurable benefits which we hope to achieve. It is still early days but the direction is the right one.
Richard Morris
Managing Director, TheGivingMachine
Trustee & vice chair, East Herts YMCA
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matt scott, 8 July 2010, 14:50
DEMOS are right; I did SROI training and it couldn't come close to measuring the work of collective community action and frankly no public service is going to trusts its highly suspect and variable choice of measurements
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Joanne Payton, 9 July 2010, 12:35
Technology can be helpful for creating quantifiable data: the difficulty is in distinguishing outputs from the real outcomes that change people's lives. Our CEO just blogged on this subject: http://www.connectassist.co.uk/knowledge-hub/measuring-social-roi
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Dee Fraser, 22 July 2010, 17:09
I think its important to distinguish between SROI as a methodology and the importance of discussing and understanding the difference you are making \(outcomes/impact.) Everyone should be doing the former! Its good to think carefully about whether SROI is the right methodology for your organisation \(there are a lot of approaches to economic evaluation out there...) I have questions about its applicability, validity and reliability and what it can actually tell us about social value.
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