Social Return on Investment Analysis (eBook)

Volker Then is Founding Director and Executive Director of the Centre for Social Investment at Heidelberg University, Germany. Christian Schober is Head of the Competence Center for Nonprofit Organizations and Social Entrepreneurship at Vienna University of Economics and Business, Austria. Olivia Rauscher is Head of Social Impact Analysis and Senior Researcher at the Competence Center for Nonprofit Organizations and Social Entrepreneurship at Vienna University of Economics and Business, Austria. Konstantin Kehl is Lecturer at the Institute of Management and Social Policy, ZHAW Zurich University of Applied Sciences, Switzerland.

Preface 6
Contents 9
About the Authors 18
List of Figures 20
List of Tables 22
1 Introduction: What Is an SROI Analysis? How Does It Relate to Other Forms of Analysis? Why Is Impact Key? 24
1.1Impact Above Everything Else? The Trend Towards Impact Measurement and Analysis 28
1.1.1What Do We Want to Contribute With This Book? Overview of the Approach 33
1.1.2How Should You Read the Book? 35
1.2How Does SROI Analysis Compare to Other Methods of Impact Measurement and Analysis? A Comprehensive Approach 35
1.2.1SROI Analysis in a Nutshell: A Summary 37
1.2.1.1 Origin 37
1.2.1.2 General Approach 37
1.2.2Social Impact Measurement vs. Social Impact Analysis: Where Should SROI Be Positioned? 40
1.2.3How is SROI Analysis Distinguished from Other Methods of (Economic) Impact Analysis or Social Impact Measurement? 43
1.2.3.1 Economic Impact Analyses in the Tradition of Evaluation 43
1.2.3.2 Social Impact Reporting, Social Accounting and Sustainability Rating Approaches—The Reporting Side 45
1.2.3.3 Impact Measurement and Social Impact in the Tradition of Development Aid and of Social and Environmental Impact Assessment 47
1.2.3.4 Other Impact Analysis and Measurement Approaches 49
1.2.4How Is SROI Analysis Conceptually Situated as Relates to Other Methods? A Mental and Analytical Framework with a Social Science Focus 50
1.3Is There Only One Form of SROI Analysis? Proposed Typology 54
1.4SROI: The Way to Measure Impact 57
References 58
2 What Interests Do Organisations Pursue with an Impact Analysis? A Guide 66
2.1Introduction: Why Impact Measurement? 67
2.2How Does Interest in an SROI Analysis Emerge? 69
2.2.1Communication to the Outside 70
2.2.1.1 Legitimacy 70
2.2.1.2 Fund-Raising 72
2.2.2The Trend Towards Impact Measurement 73
2.2.2.1 The Endeavour to Be a Pioneer, or the Need to Keep Up 73
2.2.2.2 Political Targets and Political Support 74
2.2.3The Strategic Interests of an Organisation 76
2.2.3.1 What Do Organisations Expect of SROI Analyses? 77
2.2.3.2 The Business Feasibility Perspective 78
2.2.3.3 Non-profit Reservations 79
2.3The Joint Learning Process 80
2.4What Application of the SROI Methodology Is Intended? 81
2.4.1Prospective Estimation of the Potential for Social Value Added 81
2.4.2Formative Evaluation of Success or Prospects for Success 83
2.4.3Summative Analysis of the Social Value Added Actually Achieved 84
2.5Who Should Perform the Analysis? 85
2.6Conclusion 90
References 91
3 SROI in the Context of Policy and Governance Developments 93
3.1Social Investment and Impact: New Policy Styles, Governance Tools and Their Implications 94
3.1.1From Welfare to Social Investment 95
3.1.2Challenges for Impact Measurement and Society 99
3.2SROI and European Policy Developments 102
3.2.1Impact Measurement Between Specific Policy Initiatives and Market Building 103
3.2.2Impact Measurement and Standardisation: Process Standards 106
3.3Impact Measurement and Public Policy: Conclusion 110
References 112
4 How Are Impacts Identified? The Impact Model 115
4.1Impact Model—Where Does It Come from and for What Purpose? The Introduction 116
4.1.1For What Purpose Is the Impact Model Necessary? 116
4.1.2Where Does the Impact Model Come from? 117
4.2Impact Model: What Is It? 118
4.2.1Conditions: Context, Target Group Specifics, Inputs (Resources), Structure 121
4.2.2Plan: Concept 122
4.2.3Implementation: Process/Activities 122
4.2.4Outputs 123
4.2.5Outcome: Impacts 124
4.3What Levels of Impact Measurement Can Be Distinguished? 125
4.4What Does Deadweight Mean? 127
4.5Theory of Change or Impact Model? What Is the Difference? 130
4.6What Role Do the Stakeholders Play? 131
4.7Who Are the Relevant Stakeholders and How Are Their Impacts Identified? 134
4.8Summary 137
References 139
5 How Can Impact Dimensions Be Operationalised? 142
5.1What Do Impact Models Achieve for the Goals of Projects and Organisations? 143
5.1.1Conceptualising and Modelling Impact Through Stakeholder Dialogues 143
5.1.2Selecting Dimensions, Making Decisions and Proving Impact 145
5.2What Basic Building Blocks Do All Impact Models Have in Common? 147
5.2.1Functions and Roles of Non-profit and Social Purpose Organisations 148
5.2.2The Special Character of the Political and Environmental Dimension 150
5.2.3Physiological and Psychological Effects 153
5.3The Complexity of Returns: Differentiating the Levels of Impact 154
5.3.1The Bull’s Eye of System Innovation 154
5.3.2Levels of Impact: Enriching and Relating the Functional Dimensions 156
5.3.3Priorities and “Nice to Have’s” 159
5.4An Integrated “Impact Construction Kit” and Paths to Comparability 161
5.4.1Currencies and “Exchange Rates” of Different Social Interventions 162
5.4.2Benchmarks Beyond Money and Methodological Challenges 165
5.5Where Are the Limits of SROI? 170
References 171
6 How Can Impact Be Gathered? Study Design and Empirical Execution 175
6.1Comprehending Impact: What and How Do We Want to Study? 176
6.1.1To What Level of Breadth and Depth Should Impact Be Considered? 177
6.1.2What Is the Focus of the Study? 178
6.1.3To What Extent Must the Analysis Satisfy Scientific Criteria (Rigour Vs. Relevance)? 181
6.2How Do I Proceed Specifically? Various Research Approaches 184
6.2.1Overview of Various Research Paradigms, Designs and Methods 184
6.2.2Quantitative Paradigm: Experimental Designs 187
6.2.2.1 Experimental Design 187
6.2.2.2 Quasi-experimental Design 188
6.2.3Quantitative Paradigm: Non-experimental Designs 190
6.2.3.1 Longitudinal Studies 190
6.2.3.2 Cohort Design 191
6.2.3.3 Cross-Sectional Studies 192
6.2.4Quantitative Empirical Methods 193
6.2.4.1 Questionnaire Construction and Wording of Questions 194
6.2.4.2 Conducting the Survey 195
6.2.4.3 Data Analysis and Interpretation of Data 197
6.2.5Qualitative Paradigm 198
6.2.6Qualitative Empirical Methods 199
6.2.6.1 Data Collection 200
6.2.6.2 Data Analysis 204
6.2.7Analysis Supported by Secondary Data 205
6.2.7.1 Analysis of Secondary Material: What Are Common Secondary Materials? 207
6.2.7.2 Data-Supported Estimate on the Basis of Secondary Material 210
6.3How Do You Select a Study Design? A Guide 211
6.3.1Clarifying Basic Questions 211
6.3.2The SROI Options Matrix as a Decision Aid 213
6.3.3Taking Account of the Stakeholders’ Specific Characteristics and Possibilities to Access the Field 217
6.3.4Reviewing Whether It Is Possible to Use an Evidence-Based Approach 217
6.4Summary 218
References 219
7 Can the Presumed Impacts Be Proven? Analysis from a Quantitative Point of View 222
7.1How Is Causality Dealt with? The (Correct) Attribution of Impacts 223
7.2What Possibilities and Limits Do the Basic Methods Have in the Research Process? 224
7.2.1Non-experimental Design (Longitudinal and Cross-Sectional) 225
7.2.2Quasi-Experimental Design (Control-Group Comparisons) 226
7.2.3Experimental Design (Randomised Controlled Trials) 227
7.2.4Design-Independent Limits on Generalisability 228
7.3Which Distortions in Data Collection Demand Attention? 229
7.4How Are Results Quantified? Impact Dimensions, Diversity of Methods and Variables 234
7.5What Is the Explanatory Power of SROI Dimensions? 238
7.6Well-being Indexes as an Alternative Quantitative Portrayal of Societal or Local Effects? 241
7.7What Are the Limits of Quantitative Methods? 242
References 244
8 How Can Impacts Be Monetised? 247
8.1Why Should Impacts Be Monetised? 248
8.2Isn’t It Sufficient to Use Market Prices? 250
8.3Can Valuation Take Place Without Units of Money? Alternative Valuation Methods 252
8.4How Can We Monetise? Methods for Monetising Non-market Goods 256
8.4.1Cost-Based Monetisation 256
8.4.1.1 Damage Costs 258
8.4.1.2 Avoided Damages 260
8.4.1.3 Restoration Costs 261
8.4.1.4 Replacement Costs 262
8.4.1.5 Abatement Costs 263
8.4.1.6 Evasion Costs 264
8.4.1.7 Summarising Evaluation of the Cost-Based Methods of Monetisation 265
8.4.2Monetisation on the Basis of Stated Preference Approaches 266
8.4.2.1 Contingent Valuation Method: Willingness to Pay and/or Willingness to Accept 267
8.4.2.2 Decompositional Approaches of Preference Measurement (Choice Modelling/Conjoint Analysis) 271
8.4.3Monetisation on the Basis of Revealed Preference Approaches 275
8.4.3.1 Using Direct Market Prices 275
8.4.3.2 Change in Factor Income 276
8.4.3.3 Travel Costs Method 279
8.4.3.4 Hedonic Pricing 281
8.4.4Summarising Assessment of the Preference-Based Methods of Monetisation 283
8.4.5Which Approaches Exist Beyond Costs and Preferences? 284
8.4.5.1 Valuations on the Basis of Existing Studies 284
8.4.5.2 Assessment Approaches 287
8.4.5.3 Inclusion in the Production Function 290
8.5Are the Right Things Being Monetised in the First Place? Caution When Monetising Services 291
8.6When Is Which Monetisation Method Suitable? 293
8.7Conclusion with Respect to SROI Analysis and Practical Applicability in Projects 297
References 299
9 Which Purposes Can Social Impact Analyses Support? An Overview of Applications for Results of SROI Analyses 303
9.1Which Options Exist for Using SROI Results? An Overview 304
9.1.1Communication (Target Group: The Public) 304
9.1.2Seeking Investors/Fund-Raising (Target Group: Funders) 306
9.1.3Strategy and Organisational Development (Target Group: The Organisation Itself) 308
9.1.4Strategic Cooperation and Scaling (Target Group: Sector/Industry/Field of Impact) 309
9.1.5Evidence-Based and Impact-Oriented Controlling (Target Group: The Organisation Itself) 310
9.2How Are Impact Analyses Linked to Strategy Development and Organisational Development? 311
9.2.1Classifying Strategic Goals 311
9.2.2SROI Analyses for Social Impact Investing or Impact Bond Agreements 312
9.2.3Organisational Development as a Necessary Component 314
9.3How Can Impact Measurement Be Used for Political Advocacy? 316
9.3.1How Does Successful Advocacy Work? 318
9.3.2The Contribution of Impact Measurement 319
9.4How Can Impact Measurement Be Used as a Controlling Tool? A Comprehensive Impact-Oriented Management Model 321
9.5Summary 329
References 330
10 How Have SROI Analyses Been Performed in Practice? Four Selected Case Studies 332
10.1Introduction 332
10.2Case Study: SROI Analysis of Mobile Care and Support Services in Vienna 336
10.2.1Introduction 336
10.2.2Impact Chain and Identification of Impacts 337
10.2.3Quantification of Impacts 339
10.2.4Monetising Impact 343
10.2.5Result of the Analysis 345
10.3Case Study: SROI Analysis of Multigeneration Co-housing 349
10.3.1Impact Model 349
10.3.2Identifying Impacts 351
10.3.3Quantifying Impacts 352
10.3.4Monetising Impacts 354
10.3.5Results of the Analysis 356
10.4Case Study: SROI Analysis of a Women in Development Programme in Ethiopia 357
10.4.1Introduction 358
10.4.2Impact Model and Identification of Outcomes 359
10.4.3Quantification of Outcomes 361
10.4.4Monetisation of Outcomes 362
10.4.5Results of the Analysis 366
10.5Case Study: SROI Analysis of the Norwegian Offshore & Drilling Engineering Network (NODE)
10.5.1Introduction 368
10.5.2Impact Model 368
10.5.3Identification of Impact 370
10.5.4Quantifying Impact 371
10.5.5Monetising Impact 374
10.5.6Results of the Analysis 375
10.6Summary 377
References 379
11 What Does an Organisation Need to Conduct a Sound SROI Analysis? 382
11.1Introduction: From the Perspective of the Organisation 383
11.2Awareness and Involvement of Stakeholders 384
11.3Gathering Data 386
11.4Organisational Capacity 387
11.5Willingness to Participate in Individual/Organisational Learning 389
11.6Understanding the Analysis 391
11.7Practical Tips 393
11.8Summary 397
References 398
12 SROI Revisited: Summary and Outlook 399
12.1What Have We Learned? A Review 399
12.1.1The Book Shows the Various Facets of the Analytical Path 400
12.1.2An SROI Analysis Is Rooted in Social Science 402
12.1.3SROI Analysis Always Includes a Strategic Dimension 407
12.2What Remains to Be Done? The Prospects 409
References 413
Index 414