Smartline Research
Understanding Social Value and Social Return on Investment
How do you measure the value a service brings to society? We’re working with Cornish organisations to find innovative ways to capture the intangible outcomes of social enterprise work.
Our aim is to support Cornish organisations, and we work with small and medium enterprises (SMEs) across the county. Many of these have a social purpose and are often dependent upon grants and funding to continue their valuable work.
Many of the SMEs we work with aim to improve wellbeing, mental health and improvements to the community. How do you measure that?
By listening to the needs of our clients, we were able to work together to come up with new ways of measuring success. Led by enterprises, guided by research.
Watch our video where Cornish SMEs share how they are working to measure and improve their social value.
What is social return on investment?
Return on investment (ROI) for businesses is a straightforward concept: if I invest in your business, will the business thrive and pay me back more than I put in? ROI is a simple metric that’s typically measured in financial terms. With many of the organisations we work with at Smartline, success often means something less tangible.
We can introduce some hard metrics such as “increase in number of people in X community who now have internet access”, but that only shows part of the success.
Here is an example of some of the factors organisations listed when it comes to measuring their impact, the poster lists factors like staffing, resources, the number of new projects and new connections made.
Social return on investment (SROI) is the methodology for evaluating social impact and quantifying that value in a monetary term. Essentially it’s about understanding (the sometimes hidden) benefits to society that enterprises can bring through their activities. It’s not a straightforward metric.
“If we continue to be creative and explore alternatives with individuals who feedback the positive benefits… this supports the need and therefore demonstrates that long-term health impact will save other parts of the health system in the future. ”
The opportunity
Developing a methodology to measure SROI was an organic journey for Smartline.
It came from multiple enterprise support requests to demonstrate intangible successes, which was identified at a Smartline evaluation workshop run by Dr Andrew Williams. The School for Social Entrepreneurs needed a suitable evidence-based methodology to calculate their impact and to improve their services. It all began with listening to what was needed…
Click here to view this infographic in large which describes our Social Value Journey.
“In today’s world where social programmes need to demonstrate that they deliver real impact, SROI is an incredibly powerful tool. It allows organisations to clearly link their work to outcomes for people while also improving their planning, operations and strategic thinking.”
Identified enterprise challenge
The SMEs had identified that is was hard to demonstrate value or set performance measures for intangible successes. It’s hard to prove to potential funders and stakeholders that your organisation is a viable investment, when your main metrics of success don’t involve measurable and comparable figures, but are based on less tangible outcomes like improved wellbeing.
Organisations work in groups to discuss opportunities for improving SRO.
“The Government’s levelling up agenda and reducing geographical inequalities will see local communities having far more control on how investment is made and how to improve wellbeing; and understanding the SROI impact is a key component to its success.”
Furthermore, how do you improve your organisation’s offer if there’s no measure?
The disconnect between actually achieving your aims, proving you’re achieving your aims, and funders responding positively is a huge issue for our SMEs. How do we measure social return on investment?
Refined evaluation need
Gemma Finnegan from Cornwall Rural Community Foundation (CRCC) and Dr Tim Walker, University of Exeter present the seven principles of SROI.
Dr Tim Walker carried out a literature review into existing methodologies for measuring SROI: what tools are out there? From here, we held focus groups with social entrepreneurs to establish their needs. This raised two key questions:
1. What evidence needs to be collected?
2. How can this be collected?
Smartline’s James Rowberry spoke with funding stakeholders such as NHS England and Cornwall Council: what measurements do they need to see from the SMEs when evaluating their performance?
An example of an NHS initiative is social prescribing (the GP arranges a “social prescription” for a physically and mentally beneficial activity, such as walking, swimming, or an organised intervention such as the WAVE project). Obviously, this comes with a cost, but it’s not easy to measure the wellbeing benefits of a weekly paddleboard session. What evidence could be gathered to show the success of social prescribing?
“This new way of working and delivering personalised services means we need a different way of capturing impact. In particular we are interested in how the interaction or intervention has improved people’s wellbeing, their experience of care and the way they use services as a result. ”
Identified enterprise challenge
Back to the SMEs themselves… It became clear that practical help was needed to support measuring SROI. Smartline with partners Housing Association Charitable Trust (HACT) and Cornwall Rural Community Foundation (CRCC) developed a free two-day workshop about impact and SROI evaluation.
Organisations came together at the workshop to learn more about measuring their social return of investment.
The first day looked at the theory of impact and ROI, while the second day was the practical application of these theories to the organisation.
An organic benefit was the way that the SMEs attending the workshop began to work together. They supported each other, sharing ideas and experiences. This led to a new approach for later workshops: bringing similar organisations together so this skills-sharing became part of the format.
Spread and scale
The workshops are continuing, but with that focus on similar interest groups attending together. For example, the 2021 session brings together people from arts and nature health-based organisations.
We have also partnered with the Social Value Engine, a digital tool that calculates SROI. The organisation applying for funding/evaluating their work types information into the digital web-based calculator, which uses an algorithm to produce a SROI report.
Groups list their inputs, outputs, outcomes and impacts during Smartline's workshop.
“Data provides an invaluable snapshot into people’s lives. This in turn will allow valuable information to be gathered and conclusions reached to help us better understand social movements and make lives better in the future.”
One of the most rewarding things about this project was the organic way it developed. The new approaches to SROI came about because of a clear need from SMEs, and the whole process developed iteratively, by listening, acting, then listening again.
The result? Dedicated, sector-specific evaluation workshops and the adoption of a digital online SROI tool – and hopefully increased opportunities for funding. Cornish organisations Dreadnought and Wild Wonder & Wisdom have already seen success thanks to their ability to show their intrinsic value when applying for bids.
Who is involved?
Smartline has worked with over 30 SMEs across Cornwall, along with public sector bodies including NHS England, Cornwall Council and East Riding Council.
From Smartline: Dr Tim Walker, Emma Seymour and James Rowberry, with Dr Andrew Williams identifying the need for a SROI measure in the early evaluation workshops.
A special thank you to James Williams at HACT, Gemma Finnegan at CRCC, Social Value Engine, Joanne Bannister at East Riding Council and Jessica Sellick at Rose Regeneration for their support with the delivery of the successful understanding impact and SROI workshops.
A special thank you to the following partners for their support with the delivery of the successful understanding impact and SROI workshops.
James Williams from Housing Association Charitable Trust (HACT).
The team at Limehouse Yoga Studio.
The team at Social Value Engine.
Gemma Finnegan from Cornwall Rural Community Charity (CRCC).