Transcript Document

MC15: ACCOUNTING FOR SOCIAL VALUE
Ross Wyatt
Director, Think Impact
Wednesday 19 November 2014
1.30 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
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1. About measuring success
What is social value anyway?
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The elephant(s) in the room
1.
2.
3.
4.
5.
6.
There is a preponderance organisations “doing good”
The efforts of these organisations are largely disconnected and
fragmented
There is a substantial amount of input directed to these organisations
($80B in NFP alone!)
The design of programs and interventions is still largely driven by the
fundraising potential and political attractiveness
Despite (or because of) the above, there are still overwhelming and
growing degrees of poverty, and disadvantage in Australia
We still struggle to make investment and policy decisions on noneconomic 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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Collective Impact
Collective Impact
DESIGN
Creation of Shared
Value
CONNECT
Transformational Social Change
Cross-sector
Breaking cycles
Recognise
intergenerational
challenge
collaboration
Corporate Community
Partnerships
CSR
Foster connectivity
between organisations
and sectors
Early intervention
Support early
intervention program
design
Understand and
account for second
round effects in
program design
Collective Impact
Impact investing
PROVE
Social Return on
Investment (SROI)
Results based
accountability
Social Accounting
Theories of Change
Distance travelled
measures
Focus on evidence and
outcomes based
programs
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2. Commonly used tools
Getting beyond Outputs
We’ve funded the
building of a new
wing….
Our staff have funded 20
baby incubators.……
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Getting beyond Outputs
We’ve built a new
15 bed hostel for homeless
aged people…..
We’ve provided 1,000 hours of
nutrition education…..
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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
Better sexual health
Visits to sexual health clinic
15 people attend sexual
health workshop
Improvement in family life &
well-being
30% reduction in STIs
STI tests completed
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Increased confidence
100 people access helpline
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SROI – A quick introduction
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Problems with measurement
1. Financial measurement:
limited measure of value
2. We allocate resources
to 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”
The economy
The environment
People
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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
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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“FFA does good things for people and
allows them to do positive things”
“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”
IMPROVED
QUALITY OF LIFE
REDUCED ANXIETY
Ability to improve
credit profile
Explore new
opportunities
Easier access
to future credit
Enthusiastic about
new opportunities
Discovered
stability in their life
Take advantage of
new opportunities
Ability to spend
within means
Prepared for any unexpected
future payments
“...no one else
provides a service
like this”
“I like the idea of it
being a small loan”
Liberated from past
constraints
Access to
favourable
payment terms
Ability to meet
future bill
payments
Ability to pay
off debts
Appropriate
Ability to budget for
future payments
Awareness of outstanding
bills and terms
Made changes
to household
expenditure
“I got into alcohol, got
drunk everyday, I don’t
want to go back there”
in g
f in a n c
Leave behind
negative influces
Decreased bouts
of depression
3
Undertake
previously
impossible tasks
Access to
immediate
credit
1
Opportunity to
make a new start
Confident of
improving life
Regain
independence
2
Knowledge of how
to prepare a
personal budget
Referral to
financial
counsellor
“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”
Develop trust In
loan officers
“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”
Develop a positive
future outlook
INCREASE IN
SELF ESTEEM
Ability to get things
done for self and
family
“I just wanted to move things
along and not have to wait”
Set new life goals
Trust and support of
family and friends
“I was ecstatic when I was approved,
I had found some freedom in my life”
Read more from
case studies
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Source: Fair Finance Australia
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Source: Net
Balance
Stages of an SROI: Stage 1
Stage 1: Establishing
scope and identifying
key stakeholders
It is important to have clear boundaries about what your SROI analysis
will cover, who will be involved in the process and how.
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Stages of an SROI: Stage 2
Stage 2: Mapping
outcomes
Through engaging with your stakeholders you will develop an impact
map, or theory of change, which shows the relationship between
inputs, outputs and outcomes.
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Stages of an SROI: Stage 3
Stage 3: Evidencing
outcomes and giving
them a value
This stage involves finding data to show whether outcomes have
happened and then valuing them.
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Indicators
| Indicators are ‘ways of knowing’ that an outcome (a change) has
taken place.
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
| Stakeholders can point us in right direction - ask ‘how do you
know the change has happened?’ or dig deeper when
asking
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about the change.
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Subjectivity of value
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
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
Stage 4: Establishing
impact
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.
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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 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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Projecting into the future
Benefit period – the length of time over which outcomes are expected
to endure
e.g. benefits of an employment training programme may endure
for some years after the course
Drop off – the rate at which benefits decrease over time
e.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
Stage 5: Calculating
the SROI
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.
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Stages of an SROI: Stage 6
Stage 6: Reporting,
using, and embedding
Easily forgotten, this vital last step involves sharing findings with
stakeholders and responding to them, embedding good outcomes
processes and verification of the report.
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Resources
/
SROI shows
Investment
Often VfM is
understood by
Service & Wider
real
value
for
money
comparing unit costs
Outcomes
Money
People (time
& skills)
Environment
Inputs
Outputs
Real VfM is achieved
by comparing outcomes
/ impact with
investment
Social
Impact
Impact /
SROI
Environmental
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3. Making good use of your measures
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
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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.
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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
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Effectiveness
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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?
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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
Outcome Stars
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Source: Triangle Consulting