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The Art of Assigning Specific Dollar Values to Previously Ignored Social Impacts: A Course in SROI Modeling
Bea Boccalandro, VeraWorks @bboccalandro
The Art of Assigning Specific Dollar Values to Previously Ignored Social Impacts:
A Course in SROI Modeling
October 6, 2015
A presentation by
Bea Boccalandro, President, [email protected] 717-414-2885 www.veraworks.com @bboccalandro
For
IMPACT 2030 is a global,
private sector led initiative,
developed to align companies
and their employee volunteer
actions with the Sustainable
Development Goals to create
real and sustainable change.
IMPACT 2030
IMPACT 2030 partners
Will you lead the measurement effort?
no
Similar to the ROI, the Social Return on Investment (SROI) is a ratio of benefits to costs, only in this case the return is social / societal, not financial:
SROI = Social benefit per 1 unit of costs
Detailed SROI = Social benefit (net of deadweight), monetized and (if desired) adjusted for inflation resulting from 1 unit of investment, monetized and adjusted for inflation
E.g. an SROI of 3:1 indicates that an investment of $1 delivers $3 of social value
What is Social Return on Investment?
SROI = Social benefit (net of deadweight), monetized and (if desired) adjusted for inflation resulting from 1 unit of investment, monetized and adjusted for inflation
What’s the problem?
Measure social benefits????
Monetize it????
Show causality????
SROI = Social benefit (net of deadweight),
monetized and (if desired) adjusted for inflation
resulting from 1 unit of investment, monetized and adjusted for inflation
Is it feasible for you to generate, in the next six months, SROI (dollar value of social benefit generated per dollar invested in social impact)?
1. Highly infeasible2. Infeasible3. Feasible 4. Highly feasible
Poll
Leave better equipped to better measure, and monetize, social impact
Session objective
• Introduction ✔• Determining scope • Measuring social benefits• Managing the causality issue• Monetizing social benefits• Closure
Content
All enterprise activities
s
One product
All social purpose efforts
Scope of the social impact measurement
One project
• Introduction ✔• Determining scope ✔• Measuring social benefits• Managing the causality issue• Monetizing social benefits• Closure
Content
Measure social benefits????
Something
Release the burden of perfect measurement
Examples of SROI results
56 : 1
1.57 : 1 Project Brigade
Caesars Entertainment operates in a manner that converts every $10 million in revenue into $4.6 million in social value
2.72 : 1
Theory of change / logic modelA theory of change model, or logic model, is map of the sequenced pre-conditions needed to -- or steps required to -- achieve a desired change. Although there are conceptual differences between theory of change and logic models, it’s not productive to go into these.
Start with…
Pepsico Theory of Change (w/ help from True Impact)
Source: Pepsico, Delivering Access to Water Through Partnerships, 2014.
Project Brigade program theory of change
Source: PwC, Making a difference: The social impact of Brigade, 2015.
Options for measuring social benefits
1
Measure ultimate
beneficiary outcomes /
impact
Can be monetized and turned into SROI
• Trained judgment• Qualitative research• Quantification surveys/efforts
Approaches to measuring social impact
Our focus
Adapted from: Epstein, Marc J. and Kristi Yuthas, Measuring and Improving Social Impacts: A Guide for Nonprofits, Companies, and Impact Investors, 2014.
Project Brigade social impact
Source: PwC, Making a difference: The social impact of Brigade, 2015.
Project Brigade social impact
Source: PwC, Making a difference: The social impact of Brigade, 2015.
Project Brigade
Source: PwC, Making a difference: The social impact of Brigade, 2015.
1.57 : 1
Measure social benefits????
But, I have an “unmeasurable”
impact!
Three ways to measure impact:• Measure directly• Measure an output that has been shown to predictably
lead to impact• Use indicators
Measuring social impact (no matter how murky and abstract)
An expression of something not directly measurable that is directly measurable
Indicators
What is the SROI of our mentoring?
Every $1 invested generates $2.72 of value to society
2.72 : 1
Source: Paul A. Anton, Wilder Research, Prof. Judy Temple, University of Minnesota. Analyzing the Social Return on Investment in Youth Mentoring Programs, 2007.
What is the societal value of reuniting one homeless child with her family?
Source: “MEASURING RETURN, The Operation Come Home Reunite Program” by MeasuredOutcome, 2012.
Every $1 invested in reuniting homeless youth with families generates $56 of value to society
2.72 : 1
Source: MeasuredOutcome, Bridging the gap, 2012.
GPA
We live awash in indicators!
Dow Jones Industrial Average
Miles per gallon
Snow base
Laughter
GDP
Consumer confidence indexEmployee engagement
Approval ratings
Reputation ratings
How a survey question becomes a measure of social impact
which is/are…
Indicator
Impact/Outcome
Meaningful social change
is expressed as an…
which is expressed as an…
Item(s) in an Instrument
A company that lacks compelling quantitative evidence that its social cause efforts generate
meaningful impact but cannot fund such measurement work needs to reduce its social
cause work (e.g. serve fewer people / do less) to fund the measurement
Agree – reduce services and measure
Disagree – do not reduce services and do not measure
• Accountability: Know if making a difference• Learning: Determine what works / what doesn’t• Relationships: Recruit / maintain supporters
Why measure social impact?
Those we serve deserve that we do our best to ensure we are not causing them more harm, wasting their time or squandering their hopes.
• Accountability: Know if making a difference• Learning: Determine what works / what doesn’t• Relationships: Recruit / maintain supporters• Ethics: Not measuring social impact is a form of injustice
Why measure social impact?
Measure social benefits????
Monetize it????
Show causality????
Too far from the customary. Too
murky.
Will you lead the measurement effort?
yes
• Environment• Education• Other youth• Basic human needs• International development• Arts• Advocacy
Getting into groups
• In your groups, each come up with a social impact you want to measure and, as a group, brainstorm possible indicators for each impact
• If your groups can’t come up with a reasonable indicator for any of the impacts, take note (class will help)
• Bonus points: Come up with a way to monetize one or more indicators
• Take 15 minutes• This exercise works best if you spend at least a few
minutes outdoors breathing fresh air
Applying this to your case
Measure organizational
impact
Options for measuring social benefits
21
Measure ultimate
beneficiary outcomes /
impact
Either can be monetized and turned into SROI
Twelve US nonprofit partners of the PwC and the PwC Charitable Foundation (referred to collectively as “PwC”) were invited to complete a survey designed to capture organizational impact.
The responses were anonymous vis-à-vis PwC (data was managed and analyzed by a third party, so no one at PwC saw individual responses)
The third-party researcher conducted follow-up interviews with respondents to identify any threats to the validity in the data and determine the feasibility of this process for collecting social impact data.
The experiment: Description of the pilot nonprofit impact survey and analysis
Findings: How $1 of Corporate Responsibility (appears to) generate >$1 of social value
Valuation of organizational outcomes*
To otherwise achieve the organizational outcomes PwC helped them achieve, respondents say they would have had to expend, on average, between:
$[ ]
(low estimate)
and
$[ ]
(high estimate)
* In SROI these were adjusted down 15% to account for deadweight/attribution and double counting.
Services
Estimated average volunteer hours per NPO:
+ [ ] pro-bono
+ [ ] other skills-based
+ [ ] extra-hands
Applied, with grants, to develop:
• Strategies
• Tools
• Systems
• Other
To help the nonprofit better accomplish its social mission
Inputs
Average PwC investment per key NPO (including employee time)
Cash: $[ ]
Fee waived engagement:$[ ]
Other volunteering:
$[ ]
TOTAL: $[ ]
Organizational outcomes•[ ] Improved organizational effectiveness •[ ] Increased number of individuals served •[ ] Improved organizational innovation •[ ] Additional service offered •[ ] Increased awareness/support for organization’s work •[ ] Increased staff competencies Offer higher quality services •[ ] More revenue secured (other than from PwC) •[ ] Reduced costs
Are used to to offer: That led to With a monetary value, as
follows:
Confidential follow up interviews (no one at PwC received respondents-specific data) with respondents suggest that:• While the survey was considered moderately burdensome
(4.9 where 0=not at all and 10= extremely burdensome) taking an average of 2.7 hours to complete, it was nevertheless considered worthwhile (8.1 where 0=not at all and 10= extremely) and fairly clear (7.4)
• The vast majority (83%) of pilot nonprofit partners are willing and able to complete this survey annually (17% said they currently don’t have the capacity)
• While many nonprofit partners are not comfortable providing a specific monetary estimate of the expenditures they would have had to incur to alternatively achieve the organizational capacity gains PwC allowed them to achieve, they usually can (and did) provide what they considered a valid range
Findings: Nonprofit survey appears to be a feasible ongoing social impact measurement
Organizational impact
Measure organizational
impact
Options for measuring social benefits
21
3
Measure ultimate
beneficiary outcomes /
impact
Measure activities /
outputs
Any can be monetized and turned into SROI
How can we monetize the social value of our corporate social responsibility?????
Our presence is associated with twice the societal benefits of the average company
• Introduction ✔• Determining scope ✔• Measuring social benefits ✔• Managing the causality issue• Monetizing social benefits• Closure
Content
Show causality????
• How important is it, really?• Is “proof” necessary? • It is (almost always) possible to measure causal effect
– Quasi-experimental design– Regression analysis
Managing causality
Managing the causality issue - discussion
What have you done that works?
What doesn’t work?
Where are we stuck?
• Introduction ✔• Determining scope ✔• Measuring social benefits ✔• Managing the causality issue ✔• Monetizing social benefits• Closure
Content
Monetize it????
Oh. Forgot that we already have!
Monetize it????
$
$
$$
$
Examples of monetization proxies
Source: Social Value, “A Guide to Social Return on Investment,” 2012.
• Introduction ✔• Determining scope ✔• Measuring social benefits ✔• Managing the causality issue ✔• Monetizing social benefits ✔• Closure
Content
range
The beauty of the…
One more example
“Relentless Monetization” Step 1
Identify impacts / outcomes
“Relentless Monetization” Step 2
“Relentless Monetization” Step 3
“Relentless Monetization” Step 4
“Relentless Monetization” results
Social Impact Measurement Resources
Foundation Center’s TRASI
Social Value
• Foundation Center’s TRASI: http://trasi.foundationcenter.org• Social Value (UK): http://socialvalueuk.org• Sustainable Brands • Others?
Social Impact Measurement Resources
Is it feasible for you to generate, in the next six months, SROI (dollar value of social benefit generated per dollar invested in social impact)?
1. Highly infeasible2. Infeasible3. Feasible 4. Highly feasible
Poll
It’s impossible to be highly effective without first being profoundly human