Social return on investment is 'bureaucratic and poorly understood'

Method of measuring social impact is not working, say Voice10 conference delegates

Social return on investment is too bureaucratic, puts a burden on small social enterprises and is not understood by the people who use their services, a panel of social enterprise experts told the Social Enterprise Coalition's annual conference yesterday.

Laurie Russell, chief executive of the Wise Group, a social enterprise that helps people into work, told delegates at the Voice10 conference that he did "not really trust" SROI, a system that measures organisations' social impact in financial terms.

He said one organisation had claimed to have an SROI of more than £2,500 for every pound spent.

Russell said his organisation had used social audit accounting, a different way of measuring social impact that fitted well with the work of social enterprise.

John Bennett, managing director of Pack-IT, a computing social enterprise, said he had been unable to use SROI.

"I tried doing a social impact report," he said. "I nearly binned it four times. When I showed it to the people it was supposed to show we were helping, they didn't understand it."

He said he felt the reporting was burdensome for small businesses and that they should be careful they did not become wrapped up in its bureaucracy.

Other points raised at the conference included:

  • Sarah Forster, director of development at social lender Big Issue Invest, said she felt government-backed lenders such as the Futurebuilders Fund had not helped to attract money into the sector. "Futurebuilders crowded out private sector investment," she said. "We should be crowding it in."
  • Peter Holbrook, the new chief executive of the Social Enterprise Coalition, said social enterprises should aim to contribute 3 per cent of GDP.
  • Holbrook also announced that John Bird, founder of The Big Issue, had said every copy of his magazine would carry the social enterprise mark.
  • Caroline Mason, co-founder of Investing4Good, which finds capital for social businesses, said social enterprises "must speak to banks in a language they understand" and that "we would expect them to defer to our terminology if they talked about social impact".
  • Phillip Blond, director of think tank ResPublica, said it was not enough for social enterprises to try to change the system. "Social enterprise needs to become the system," he said.


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