Measuring social ROI

by Patrick Nash, Chief Executive, Connect Assist

Many charities can't measure their own social impact

According to the think tank Demos in its report ‘Measuring social value’and covered by Third Sector 5 July most charities “are not able to measure social return on investment.” As social outcomes are the ultimate aim of most charities, the ability to tangibly measure the difference they make is a major issue. And, the reason that most organisations aren’t able to measure that difference, is because the methodology used can mean that they spend more time trying to measure what they’re doing than actually doing it.

Social Return on Investment (SROI) is a method to assign monetary value to social and environmental benefits. Dan Leighton, a senior researcher and co-author of the report Third Sector “The Government likes SROI because it has the ability to create monetary values for social outcomes,” adding that “…it is complicated and burdensome for charities.”

He said the sector would need to recognise that some measurement was necessary and develop effective metrics to measure its outputs. But he also said the Government would have to realise it was unrealistic to apply the ‘gold standard’ of SROI to many organisations. A third of the sector’s total income and over a quarter of the sector’s organisations receive more than three-quarters of their funding from Government and stand to be affected by a new emphasis on SROI. Methods of evaluation for SROI vary, and there are still many difficulties in attributing financial values to social benefits. Few of the organisations assessed by Demos were deemed ‘SROI-ready’. So, what can organisations do to move in the right direction, without over-burdening themselves?

We all understand that we need to do it, how to do it is the issue

I’m sure everyone would agree that it’s important for any non-profit organisation to define its outcomes in a quantitative way, and to be able to measure and communicate the social value it provides. The challenge is actually doing it. We’ve seen many organisations try to transplant commercial metrics, for example numbers of calls answered by a helpline. This just doesn’t do the job. How do you know that any of the people whose calls were taken actually benefitted from the call?

In our blog ‘The difference between outputs and outcomes’ we discuss how conventional metrics miss the point when dealing with social benefits, and argue that organisations need to carefully measure outcomes. We’ve often found that organisations are simply counting the wrong things. It is entirely possible to measure outcomes in a tangible and quantifiable manner, and once in place, straightforward to apply in practice. Our approach is a stepping stone to that gold standard – but one that most charities can actually manage.

Technology can help

At the recent Institute of Fundraising’s National Conference Sam Thomas, from YouthNet, explained the difficulties of measuring the effectiveness of charities’ advice services because of a need for the protection of data and confidentiality rules. We completely agree that confidentiality is essential, but we don’t agree that it is a barrier to effective measurement. It has been proven time and time again across charities we work with that with an appropriate measurement strategy and effective technology it is perfectly possible to do so without jeopardising the confidential relationship with service users.

Technology is normally associated with ‘hard’ outputs: how many visitors to your website, how many page views of your factsheet, how many calls were taken – but it can also measure social outcomes, which will then deliver social value data. Collecting the difference each of a charity's interventions made to the family income, the ability to work, health and other key factors across many interventions will deliver strong outcomes data and measures of social value.

If your organisation can’t turn to its funders, donors and beneficiaries and point to a measure of success in terms of social impact, then it is time to think carefully about what outcomes you’re looking to deliver and how technology can help you to measure them.

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Connect Assist runs professional helplines and web systems for charities and organisations that help people to make positive life changes that last. Services include:

• Transformational Helplines providing professional help and support day and night
• Engagement Systems that create lasting relationships with the people that you help
• Feedback & Insight that enables you to adapt quickly to changing needs