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Impact Measurement and Social Return on Investment

Blog post   •   Jun 23, 2017 11:50 BST

 Over the past few years at the Foundation for Social Improvement (FSI), we have been spending more and more time discussing and working on impact measurement with charities all around the UK. The sector is becoming increasingly savvy in this field and some charities are doing some really innovative things. However, as this area becomes more and more important, it is vital that your organisation is not left behind.

Here are some tips on impact measurement, reporting and social return on investment which are the basis for the consultancy support we provide around impact:

1.Start with a model to understand the change you make

The first place to start is with a model, often a Theory of Change. This helps you understand the changes you make for the people you work with. Think of it like a road map which shows you how your activities lead to an impact.

2.Tell your story through outcomes

Tell your story in terms of the changes you make for people, not the number of people you see or the quality of the service you deliver. We often see charities focussing on outputs and feedback on the quality of their service but a more compelling story is to show the changes (both hard and soft outcomes) you achieved.

3.Audit your monitoring and evaluation

Are you collecting the right data to show your outcomes? This step is not always about adding more steps or creating more work but about building in outcomes data collection into existing processes. Often replacing a few of those quality questions!

4.Collect a mix of data

Both quantitative and qualitative. You should be telling a story to both the head and heart of the reader. Think case studies with statistics, quotes next to graphs. This will help you tell a fuller and more compelling story.

5.Consider your audience

Consider the audiences you need to share your impact with, and then decide what messages they are interested in and what you want them to understand about your work.

The other buzz we are hearing a lot about is Social Return on Investment or SROI. Essentially SROI is a way of measuring a broad concept of the value (social, environmental and economic) of the impact you have. It doesn’t have to be communicated financially (i.e. for every £1 spent on this project we deliver £4.19 of social value) but it almost always is.

It can be an incredibly powerful and compelling way of telling your story as an organisation, especially in a competitive market where commissioners are looking for value for money. However, it will not be right for everyone organisation and I have seen a number of reports where charities have claimed their social return is incredibly high and my initial reaction is often dubious. It can also be an expensive process to complete.

Whilst it may not be right for you (and there are loads of great ways of demonstrating impact without SROI), the principles of it can prove a useful tool for anyone looking into this field.

The first principle is to involve stakeholders and keeping your beneficiaries at the centre of your impact measurement is one of the most important things to consider with any data collection.

The second principle is to understand what changes and for who. This links with point 2 above about telling your story through outcomes.

When you have these you value the things that matter (outcomes and not quality) and only include what is material. It is important to be proportional in your impact measurement, making sure that the process doesn’t take away from your work with beneficiaries or put excessive pressure on staff.

Then you need to not over-claim (this will put people off anyway), be transparent and be able to verify the result (two key principles for building trust and lasting relationships).

If SROI is right for you then it can be a great way forward but there are other options such as a cost benefit analysis which doesn’t include things like deadweight and attribution.

A lot of the best impact measurement and reporting we come across relies on understanding the audience for impact data, ensuring the correct data was collected and then communicating it in a compelling way. This is not always easy but there are lots of creative ways you can do this.

Alex Hayes works on consultancy and development at the Foundation for Social Improvement (FSI). The FSI are the charity behind Small Charity Week and offer free and heavily subsidised support to small charities including full day training courses in Demonstrating Your Impact.

For more information visit www.thefsi.org or e-mail alex@thefsi.org

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