Jury out on SROI tools
A recent report from the Third Sector Research Centre (TSRC) has highlighted some of the challenges associated with using Social Return on Investment (SROI) to evaluate the impact of third sector organisations (TSOs).
These include too much scope for ‘personal judgement’ and the difficulty of comparing results. Social Return on Investment is one approach being developed to measure the social, environmental and economic impact of third sector activities.
Whilst there are a range of approaches, SROI has received particular attention and is being promoted by some TSOs, public and private bodies. It involves attributing a financial value to inputs and outcomes, and calculating these as a ratio. For example, if the SROI is 3:1, it means that every pound invested in the organisation generates a social value worth £3.
The report goes on to state that: “As a framework, SROI provides useful guidelines to help organisations collect evidence and map their impact. But there are areas where more research is required, for example, on how stake-holders are involved in determining outcome measures and on the use of procedures that aim to standardise the way SROI is calculated.”
One of the report’s authors, Dr Malin Arvidson said: “SROI is likely to become an increasingly dominant approach to measuring the impact of voluntary organisations due to support from various parts of the public sector. But analysis of SROI raises important questions about why and how we measure impact. SROI arguably provides a powerful tool to help organisations illustrate the value they create in a language that those outside the sector understand. But we need to pay attention to how results are used, especially as there is a tendency to adopt it as a comparative tool. Furthermore, if it doesn’t help us to understand why change happens then it may not help organisations to improve or replicate interventions.”
For a full analysis of the research see: www.charitiesdirect.com/caritas-magazine/sroi-limitation-findings-should-not-hold-back-learning-to-use-the-tool-properly-896.html
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