The Art of Assigning Specific Dollar Values to Previously Ignored Social Impacts: A Course in SROI...

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

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


Project Brigade


1.57 : 1


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?


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


21

Measure ultimate


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


21

3

Measure ultimate


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” 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

http://socialvalueuk.org/

http://socialvalueuk.org/

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

The Art of Assigning Specific Dollar Values to Previously Ignored Social Impacts: A Course in SROI...

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