Guide to quantifying social returns launched

By Paul Jump, Third Sector Online, 6 July 2007

A new step-by-step guide to calculating social returns on investment has been launched by think tank the New Economics Foundation.

The guide, launched at the Social Enterprise Research conference at London Southbank University, is intended to allow sector organisations to demonstrate and quantify their wider social value when applying for grants and bidding for contracts.

Jeremy Nicholls, co-author of the report said the Governmental tendering process had a "potentially fatal blind-spot" regarding third sector organisations because of its "narrow focus on money in and crude number of outputs out".

Lisa Sanfilippo, the New Economics Foundation's head of measurement and evaluation, added: "Decisions from the Treasury down are guided by narrow cost-benefit analysis that fail to capture the full value of spending decisions and ignore wider social benefits like the amount of money kept circulating in a regeneration area, or the benefits of bringing the long-term unemployed back into work."

She said the guide in its current form was aimed at third sector organisations rather than procurement officers, but she hoped that by speaking in terms of social returns, and by presenting it in terms grantmakers understand, voluntary organisations could influence funders' criteria.

She said: "There has been a power imbalance between Government and the third sector. Government talks in terms of targets and outputs and organisations have had to respond in that language or lose out. This is a way to go into the conversation with a different idea about what value is. This will lead to a better and fuller discussion."

She said that working through the process of quantifying social returns would also help organisations to better identify failings and focus minds on "for whom and with whom" they create value.

The guide draws on New Economics Foundation's experience of piloting SROI (social return on investment) measurements with a range of social enterprises in collaboration with the Adventure Capital Fund and Social Firms UK. It also includes detailed worked example and case studies of two social enterprises that employ disabled people.

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