Wednesday, 16 May 2012

Whose SROI Now?


That's Social Return on Investment by the way (and apologies to Connie Francis for the pun in my title).

I'm prompted by a recent Arts Council report on ways to measure the economic benefits of art and culture. It highlights SROI as relevant to capturing the wider social gain from organisations' work (and this applies across the third sector, not just to arts). This is particularly pertinent to organisations seeking to prove their worth when funding is in short supply - and there is increasing interest in SROI as a means of doing this.

I'm pleased to say the Arts Council report maintains a balance rather than overstressing the funding angle. It starts by asking why the evaluation is needed in the first place. Influencing funders (present and future) may be one reason, but there should be others including helping the organisation itself improve effectiveness.   In my view, this is where SROI scores well; it gives organisations insight into how they generate value, and from this understand how they can do it better.

People always tend to focus on numbers, and the SROI ratio (value generated per £1 invested) naturally attracts attention. We've not yet seen this taken as far as comparing SROI ratios in league tables, and I hope we never will. But it's a risk we need to be aware of and steer people away from, because the analysis is actually more important than this end result.

For example, a health charity can increase its understanding of clients and their situations. It can also assess the impact of its work, not just on clients themselves but on their families, on the NHS and other statutory services, and on the wider community. And with this understanding it can make changes that strengthen this impact further.

So whose SROI? Please, not just for funders, still less for consultants that compile it. Let's focus on organisations 'owning' the results of their own SROIs, and using these to develop their services further. It then becomes a return on investment in every sense of the term.

You can find more background on SROI here.