Held in Johannesburg at Tsogo Sun (9 February 2016) and Cape Town at Sanlam (11 February 2016)
Effective monitoring and evaluation is imperative for decision-making, improved project implementation and determining the results of CSI projects and programmes. Social Return on Investment (SROI) – a fairly new concept in South Africa – is but one approach to monitoring and evaluation. It focusses on developing an understanding about whether a company’s CSI project or programme is creating value, and how that value can be quantified. While not a precise science, the monetisation of the value created by a CSI project or programme can be used to effectively communicate the project’s ‘return’ and to motivate for the maintenance or expansion of that project or programme.
How to measure value
1) Understand project boundaries
- Engage the right stakeholders
- Be clear on the timeframe of the project/programme, in relation to the timeframe being measured. Limit the calculation of value to a maximum of five years to avoid over-claiming.
- Determine how relevant and significant the project/programme is to its beneficiaries. Understand whether the project/programme is triggering positive or negative change in the daily lives of beneficiaries, and whether ‘first needs’ are being met. If a project/programme is not capacitated to address first needs, consider partnering with organisations better suited to respond to these.
2) Understand the theory of change
- The theory of change is the story behind the relationship between the input, activity, output, outcome and impact that needs to be understood prior to any further assessment.
- The direct link between any change in beneficiaries’ lives and the project/programme efforts should be carefully assessed. Outside influences and any additional support should be accounted for, so that a single project/programme is not over-claiming value that should be attributed elsewhere.
3) Establish indicators
- Building indicators require a combination of quantitative and qualitative, as well as objective and subjective data in order to confirm that change is happening.
- There is no set number of how many indicators can or should be used. Companies can use as many as is needed.
4) Calculate the value of change
(Total benefits – external influences impacting change – negative change)
Total investment in project
Proxies used to calculate benefits:
Option 1: Existing value/price in the market place
Option 2: Benchmarking
Option 3: No existing cost, benefits valued by stakeholders and refined annually
- Once the appropriate proxy has been used to value benefits, any negative changes inadvertently caused by the project or programme, as well as any external influences such as other organisations working with the beneficiaries, should be subtracted from the benefits. This is then divided by the total investment on the project.
Key discussion points
- Once the SROI has been calculated, numbers can be adjusted to estimate the value that could be created if a project or programme were to be expanded, as well as to forecast existing project or programme growth.
- While the SROI methodology has seven principles which are relevant for all countries, monitoring questions should be customised, based on specific contexts and projects.
- The main risk associated with SROI is over-claiming on the value created by a single project/intervention. If unsure, claim less. Claiming 100% of impact is not possible, as there are too many external factors to account for.
- There may also be some risk associated with subjectivity when measuring value. This can be minimised by being completely transparent with methodology and proxies used.
- Funders and implementing partners should both be involved in monitoring and evaluation. The extent to which measurement is outsourced should be based on the company’s needs and capacity. It is recommended that non-profit organisations budget for monitoring and evaluation in their proposals, and that funders contribute to the costs and work with their implementing partners to agree M&E frameworks.
- With an explanation for inclusion, the value created for indirect or unintended beneficiaries of a project or programme can also be accounted for in the SROI calculation.
- SROI is meant to accelerate positive change, not compromise it. However, this approach can be expensive and time-intensive. The right balance must be found between time spent and ‘good enough’ results (i.e. 80% of value grasped) to make the informed decisions.
- The number that emerges from the SROI process can be used to expand a project or programme, and bring on valuable partners. For example, if a company can show how much money its CSI initiative is helping to save government, government may be more inclined to invest in that project, for the promise of greater return.
- SROI is intended as a tool for internal reflection and improvement, and not as a value to be compared with other projects or programmes. However, if companies were to become more transparent and share proxies at industry level, it could inspire increased impact-oriented CSI strategies.
Wizeimpact offers strategic sustainability consultancy services, measures corporate social impact, trains corporate leaders on breakthrough sustainability concepts with a social edge, and helps to spur social innovations. Its aims to change the way that business is done, with the vision of regenerating the ecosystems that we live in, via stimulated innovations, thus growing businesses in truly beneficial ways.