Transcript Document

Value for Money (VfM) in international
development: useful elements of
Social Return on Investment (SROI)
Michael Weatherhead
nef consulting (new economics foundation)
23rd November 2010
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Treasury VfM Definition
“Wider social and environmental costs and benefits for
which there is no market price also need to be brought
into any assessment. They will often be more difficult
to assess but are often important and should not be
ignored simply because they cannot easily be costed.”
HM Treasury Green Book
1.Effectiveness, not lowest cost
2.Wider costs and benefits
3.Whole-of-life costs
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Value for Money
Resources /
Investment
Often VfM is
understood by
comparing unit costs
Money
People
Environment
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Service & Wider
Outcomes
Economic
Inputs
Outputs
Real VfM is achieved
by comparing outcomes
with investment
Social
Environmental
How does SROI fit in?
• Framework for telling us how effectively money
is spent – make VfM decisions
• Adjusted form of cost-benefit analysis.
SROI = value of positive + negative outcomes
investment (or cost)
• Essentially a measure of the efficiency of
achieving outcomes
• It considers triple-bottom-line benefits and
investments – economic, social & environmental
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Taking a lead
• Stakeholder informed in development of:
– Theory of change (logic model)
– Understanding of outcomes
– Understanding of value of outcomes
– Understanding of impact considerations
Inclusion of these considerations builds a case
to put to any donor
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National Accounts of wellbeing
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Understanding impact
• Deadweight: what would have happened anyway?
• Attribution: how much is down to this project, and how
much down to other factors?
• Displacement: have we just moved an outcome to / from
somewhere else?
• Benefit period: how long does the outcome last, and
does the effect ‘drop off’ over time?
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Impact: Attribution
• Attribution – how much credit can your
organisation take for the outcomes?
– Expressed as a percentage
– Not an exact science
• Methods:
– Based on your understanding of the journey
of change
– Involve stakeholders – interviews or surveys
– Consult with other organisations
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Attribution stages
1. No account of attribution levels
Effectively attribution = 100%
2. Informed estimate of attribution levels
Qualitative research allows SROI practitioner to divide
attribution between contributors
3. Quantitative research
Quantitative stakeholder research gives average
stakeholder’s view on contributors
4. Academic research
Academic research can help refine (although not replace)
stakeholder research
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Partnership working
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