the price of everything and the value of nothing?

SROI is a great tool but if it is used when an organisation isn't ready it could spell disaster.

The famous Oscar Wilde quote above comes to mind when looking at the rapid adoption of Social Return On Investment.  SROI is a great tool for displaying value if you work in a field such as employment support, business support or homelessness where there is a direct monetary value in what you do or plenty of evidence of the savings achieved that you can use as "proxies".  But what if your results provide social impact that does not generate a saving for the public purse or create income for a community?  Is the difference those Social Enterprises make somehow less important?

Some social enterprises I have worked with deliver real value to their beneficiaries or community yet the work involved in trying to monetise the impact would bankrupt organisations that are struggling to survive.  Proxies i.e. exising research or work that establishes an accepted average (for example, the amount it typically costs the government to get someone into work) are a means of saving your organisation from time intensive or costly work that would have to be repeated each time a piece of work is delivered but, again, some organisations deliver outcomes for which no proxies exist.

I fear that there is a danger in the drive toward SROI that Social Enterprises that can easily monetise the outcomes or impacts of their work will be deemed as providing more "value" than those whose impact is less tangible.  Is the Social Enterprise train heading into a landscape where only monetary value matters?  Isn't this why we created an alternative economy in the first place, because the "non-profitable" activities that create a sense of place, of wellbeing and of humanity matter just as much as those that generate fiscal wealth?

When considering Social Impact it is important that we remember to include those measures that are not easily monetised so we do not lose the real value.

So, Social Enterprise members and managers, what is the point of this rant?

What is clear is that you will need to engage with the idea of Social Return on Investment if your social impact is your product, or if you want to justify your existence to certain stakeholders.   My advice is that before you enter into the SROI process you double check what is important to your organisation.  What are your aims and objectives?  What would success look like to you?  You can always measure both internal success and SROI measures for external parties - stakeholders, customers, whoever.  Get your own strategic goals in place before you start SROI.  But if you fail to understand what is important to you, there is a risk you could become SROI led in the way that some of the third sector became funding led and suffered mission drift in the past.

Along with the Wilde quote, I also find this Cree proverb relevant. I will leave you to interpret it how you see fit: "Only when the last tree has died and the last river been poisoned and the last fish been caught will we realise we cannot eat money".

If you are embarking on an SROI or social impact measurement process and you need consultancy, training or support, get in touch.  I charge reasonable rates and have 8 years direct experience of developing social impact measures.