#cpacongress mc15: accounting for social value ross wyatt director, think impact wednesday 19...

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MC15: ACCOUNTING FOR SOCIAL VALUE 

Ross WyattDirector, Think Impact

Wednesday 19 November 20141.30 PM - 5.00 PM

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Checking In

• What would you like to achieve from this session?

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Today’s Structure

First Hour: About measuring success

Second Hour: Some commonly used tools

Third Hour: Making good use of your measures

1. About measuring success

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What is social value anyway?

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The elephant(s) in the room1. There is a preponderance organisations “doing good”

2. The efforts of these organisations are largely disconnected and fragmented

3. There is a substantial amount of input directed to these organisations ($80B in NFP alone!)

4. The design of programs and interventions is still largely driven by the fundraising potential and political attractiveness

5. Despite (or because of) the above, there are still overwhelming and growing degrees of poverty, and disadvantage in Australia

6. We still struggle to make investment and policy decisions on non-economic bases

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Who is responsible for addressing society’s challenges?

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What is success?

What is progress?

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Exercise 1. How does your organisation define success?

Write down a definition and discuss with others at your table.

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Exercise 2. The most important measures in your organisation.Write down the 3 measures most discussed in your organisation.

1._____________________________________________________

2._____________________________________________________

3._____________________________________________________

Reflect on whether they really tell you if your organisation is doing a good job. Discuss in your groups.

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What is happening to address the elephant in the room?

Providing better evidence of outcomes

Seeking greater collaboration between sectors

Designing interventions which break cycles of disadvantage

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Transformational Social Change

Collecti ve Impact

Creati on of Shared Value

Cross-sector collaborati on

Corporate Community Partnerships

CSR

Collecti ve Impact

Impact investi ng

Social Return on Investment (SROI)

Results based accountabil ity

Social Accounti ng

Theories of Change

Distance travelled measures

Collecti ve Impact

Early interventi on

Breaking cycles

Recognise intergenerati onal challenge

Understand and account for second round eff ects in program design

CONNECT

Foster connectivity between organisations

and sectors

DESIGN

Support early intervention program

design

PROVE

Focus on evidence and outcomes based

programs

2. Commonly used tools

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Getting beyond Outputs

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We’ve funded the building of a new wing…. Our staff have funded 20

baby incubators.……

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We’ve built a new 15 bed hostel for homeless aged people…..

We’ve provided 1,000 hours of nutrition education…..

Getting beyond Outputs

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So what?

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Exercise 3. What is an outcome?

Discuss in your groups what you mean when you say “outcome”

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The two most used tools for social accounting• Results Based Accountability

• www.raguide.org • www.resultsaccountability.com • www.resultsleadership.org

• Social Return on Investment (SROI)• www.thesroinetwork.org • www.neweconomics.org

• Also Social Accounting and Audit (SAA), Social impact Assessment (SIA), Most Significant Change Technique (MSC)

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Results Based Accountability – An introduction

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Results Based Accountability

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RBA – 3 Key Questions

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Exercise 3. 10 Seeds evaluation of three questions

Question – Think about your current organisation No of seeds

How much did we do?

How well did we do it?

Is anybody better off?

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RBA – Two key principles

1. Start with the ends, and work backwards to the means

2. Data driven, transparent decision making

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RBA – Two kinds of accountability

• Population Accountability • About the wellbeing of WHOLE POPULATIONS

(for Communities, Cities, Countries, States, Nations)

• Performance Accountability• About the wellbeing of CLIENT POPULATIONS

(for Programs, Agencies, Service Systems)

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The language of RBA

Source –Results Leadership Group

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RBA in a health context

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RBA in an education context

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RBA – Not all performance measures are equal!

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Exercise 4. Outcome refresher

Outputs v Outcomes

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STI tests completed

15 people attend sexual health workshop

Visits to sexual health clinic

100 people access helpline

Better sexual health

Improvement in family life & well-being

Increased confidence

30% reduction in STIs

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SROI – A quick introduction

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Problems with measurement

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1. Financial measurement:limited measure of value

2. We allocate resourcesto the things we can measure

3: Stakeholders are often left out of decision making

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The challenge – Measurement across triple bottom line”

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The economy PeopleThe environment

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Development of SROI

How has it been used?• Way to understand how and where social value is

created and allocate resources/ effort accordingly• Supporting investment decisions• Attracting funding by showing tangible benefits

gained

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What is SROI?

SROI is a way of expressing outcomes in relation to investment. It’s about tracking and quantifying change

SROI = [Value of outcomes]

[Investment]i.e. A ratio expressed in financial terms – for every $1 of input to the program $4.20 worth of social

value is created ($1:$4.20)

• It considers triple-bottom-line benefits and investments (economic, social, environmental)• It is an outcomes based evaluation• It measures change that matters to stakeholders (the people organisations and

communities directly affected)• It can be evaluative or forecastive

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What SROI is not

SROI is not:• Designed to capture and quantify every outcome

for every stakeholder• About establishing a stand alone financial value

- the values calculated, although expressed in monetary terms, do not equate to a financial return, and the SROI ratio is one part of the story of change illuminated through an SROI

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Principles

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1. Involve Stakeholders

2. Understand what changes

3. Value the things that matter

4. Only include what is material

5. Do not over claim

6. Be transparent

7. Verify the result

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Stages of an SROI

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Stage 1: Establishing scope and identifying

key stakeholders

Stage 2: Mapping outcomes

Stage 3: Evidencing outcomes and giving

them a value

Stage 4: Establishing impact

Stage 5: Calculating the SROI

Stage 6: Reporting, using, and embedding

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What does the finished ‘product’ look like?

1. A ‘corporate ready’ theory of change

2. The full SROI dashboard

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REDUCED ANXIETY IMPROVED QUALITY OF LIFE

INCREASE IN SELF ESTEEM

Easier access to future creditAbility to improve

credit profile

Discovered stability in their life

Enthusiastic about new opportunities

Explore new opportunities

Take advantage of new opportunitiesAbility to spend

within means

Ability to meet future bill payments

Prepared for any unexpected future payments

Made changes to household expenditure

Awareness of outstanding bills and terms

Ability to budget for future payments

Develop trust In loan officers

Confident of improving life

Trust and support of family and friends

Ability to get things done for self and

family

Set new life goals

Knowledge of how to prepare a

personal budgetReferral to financial

counsellor

Access to favourable

payment terms

Access to immediate

credit

Opportunity to make a new start

Ability to pay off debts

Undertake previously

impossible tasks

Liberated from past constraints

Regain independence

Decreased bouts of depressionLeave behind

negative influces

Develop a positive future outlook

“I got into alcohol, got drunk everyday, I don’t want to go back there”

Appropriate

“It has allowed her to have a whole new start”“Has allowed me to start life afresh“The loan saved my life”“God heard my prayers”

“There is the human element here“...they’re like your friends”“...these people really care about you and are not like Cash Converters who are just out to get you”

“I was ecstatic when I was approved, I had found some freedom in my life”

“I just wanted to move things along and not have to wait”

“FFA does good things for people and allows them to do positive things”

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Read more from case studies

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3

“Feels like a weight has been lifted off my shoulders” “Without loan, there would be no transport, would not be able to get around would still be trying to figure out how to pay Cash Converters“The payments are flexible, they said that if I wasn’t able to afford

the repayment in 12 months, it could be changed to 18”

financing

“...no one else provides a service like this” “I like the idea of it being a small loan”

Source: Fair Finance Australia

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Source: Net Balance

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Stages of an SROI: Stage 1

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It is important to have clear boundaries about what your SROI analysis will cover, who will be involved in the process and how.

Stage 1: Establishing scope and identifying

key stakeholders

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Stages of an SROI: Stage 2

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Through engaging with your stakeholders you will develop an impact map, or theory of change, which shows the relationship between inputs, outputs and outcomes.

Stage 2: Mapping outcomes

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Stages of an SROI: Stage 3

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This stage involves finding data to show whether outcomes have happened and then valuing them.

Stage 3: Evidencing outcomes and giving

them a value

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Indicators

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| Indicators are ‘ways of knowing’ that an outcome (a change) has taken place.

| Stakeholders can point us in right direction - ask ‘how do you know the change has happened?’ or dig deeper when asking about the change.

Stakeholder Outcome Indicators

Long term unemployed

Person (A) finds sustainable & meaningful employment

• (A) accepts a job offer• (A) stays in employment for at least 6 months• (A) self-reports job satisfaction

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Subjectivity of value

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Value is adjusted...not by any accurate measure, but by the higgling and bargaining of the

market, according to that sort of rough equality which, though not exact, is sufficient for carrying on

the business of common life.

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Subjectivity of value

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Can I put a value on anything?

Can I find a value which, though not exact, is sufficient for helping me evaluate change?

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Valuing and monetisation

So, value means different things to different people.

All prices are approximations of value, or what are known as proxies

SROI uses financial proxies to estimate the social value of non-traded goods* to different stakeholders. *Things that we don’t normally put a value on

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Proxies

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Exercise 5. How much is your service worth to your stakeholders?Take a moment to reflect on the financial valuation of the change you create. What traded ways might people experience a similar outcome?

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Stages of an SROI: Stage 4

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Having collected evidence on outcomes and monetised them, those aspects of change that would have happened anyway or are a result of other factors are eliminated from consideration.

Stage 4: Establishing impact

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Impact

• Specific definition in SROI – refers to the ADDED VALUE of the intervention

• The difference you make after:

Deadweight

Attribution

Displacement

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Determining Deadweight

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Impact: Displacement

Displacement is where all or part of the value is not actually created by the activities, but is moved from elsewhere.

The proportion of value that is not created but instead displaced from elsewhere must be removed from the calculation.

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Impact: Attribution

Attribution – how much credit can your organisation take for the outcomes?Expressed as a percentageNot an exact science

Methods:Based on your understanding of the journey of changeInvolve stakeholders – interviews or surveysConsult with other organisations

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Projecting into the future

Benefit period – the length of time over which outcomes are expected to enduree.g. benefits of an employment training programme may endure for some years after the course

Drop off – the rate at which benefits decrease over timee.g. it is likely that benefit for training participants wears off as time goes on

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Stages of an SROI: Stage 5

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This stage involves adding up all the benefits, subtracting any negatives and comparing the result to the investment. This is also where the sensitivity of the results can be tested.

Stage 5: Calculating the SROI

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Stages of an SROI: Stage 6

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Easily forgotten, this vital last step involves sharing findings with stakeholders and responding to them, embedding good outcomes processes and verification of the report.

Stage 6: Reporting, using, and embedding

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SROI shows real value for money

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Money

Environment

People (time & skills) Inputs Outputs

Service & Wider Outcomes

Environmental

Social

Often VfM is understood by

comparing unit costs

Real VfM is achievedby comparing

outcomes / impact with investment

Impact / SROIImpact

Resources / Investment

3. Making good use of your measures

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Exercise 6 – Stories of change

Draw your organisation’s story (or theory) of change.

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What will change if we do a better job of communicating impact?

Open discussion

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Introducing the Six Domains of Change

Communicating Impact

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Purpose

• Mission definition, clarification, creep, etc• Why would an impact analysis have any relevance to an

organisation’s mission?• Any impact analysis must be conducted and read in the context of

your organisation’s stated or unstated mission.

Key question: “What difference am I trying to make?”

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Exercise 7 – Our purpose in life

Write one sentence which best describes why your organisation exists. __________________________________________________________________________________________________________________________________________________________________________________________

In pairs discuss how well your “official” mission statement matches your view of the organisations reason for being. Rate the match out of 10 (10 = perfect match) and explain your reasoning. __________________________________________________________________________________________________________________________________________________________________________________________

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Programs

• Impact analysis assesses the change resulting from the delivery of your services and programs…

• …So doesn’t it make sense that you would find ways to modify programs based on your findings?

Key questions: “Is it the right difference?” “Can I make more difference?

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Exercise 8 – Problem eased or problem solved?

In groups of 4-5 discuss the degree to which your programs deal with long-term, intergenerational, and systemic disadvantage. How will impact analysis affect your answers?

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Effectiveness

• Does our impact analysis demonstrate our effectiveness?• Are we making enough change given the scale of our inputs?

Key question: “How much difference am I making?”

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Exercise 9 – Bang for buck

In groups of 4-5 discuss the difference between these three terms:

Efficiency _______________________________________________________________________________________________________________________________________________________________________________________

Effectiveness _______________________________________________________________________________________________________________________________________________________________________________________

Appropriateness _______________________________________________________________________________________________________________________________________________________________________________________

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Collaboration

• Is collaboration always good? Or bad?• What does effective collaboration look like?• What would better collaboration look like to our intended

beneficiaries?• How does my impact analysis assist my Collective Impact efforts?

Key question: “Could I make more impact with better connectedness to other efforts”

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Exercise 10 – Working together

In your teams identify the top five things that prevent For-Purpose organisations collaborating effectively

1._______________________________________________

2._______________________________________________

3._______________________________________________

How can impact analysis overcome these barriers? _____________________________________________________________________________________________________________________________________________________________________

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Supporters

Includes funders, staff, volunteers, board members. Who else?“The greatest source of energy in an organisation is purpose.” Mike Rennie,

Managing Partner, McKinsey Australia

How can your impact analysis connect your people with your purpose?

Key question: “How can my supporters see the impact we are making?”

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Exercise 11 – Name that name!

List the people/groups who just might be interested in knowing the results of your impact analysis, and why?:

Who? ______________________________________________________________________________________________________________________________________________________________________________________________________

Why? ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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Policy

• Impact analyses can be used to influence the policy framework you operate in. How?

• Is policy really geared to maximise impact?

Key question: “How can impact be used to drive policy?”

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Exercise 12 – Playing politics

In groups discuss the policy environment you each operate in and provide fresh perspectives on how impact analysis might be used to influence policy.

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Thank you.

Appendix

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Outcome Stars

Source: Triangle Consulting