Is SROI another bandwagon?

If the title of this posting seems a tad cynical, I confess to it up front.  But the question being posed is meant to stir thinking more so than debunk SROI (which stands for “Social Return on Investment”). Honest truth is I don’t know enough about SROI to sing masterfully its praises or lampoon it or anything inbetween.

I attended a recent talk by Jermey Nicolls who came over from England to speak to and work with local people on the topic. I like him, his style and humour, and I have to say my head was nodding up and down more often than back and forth.  There were sharp minds in the room and I have colleagues who are active in SROI work and when I see people I respect involved with something “new” or different, I tend to pay attention.

I got my hands on  Guide to Social Return on Investment  (PDF) which is published by the British government – in fact it comes out of the Office of the Third Sector (Canada, take notice). It is both a case for SROI and a How-to guide. I gave it my first swift reading and based on that I will read it again with more dedication, but here are some initial reactions.

I remember way back when Outcomes first peeked its complicated yet well intentioned head into the non profit sector. Its influence was quick and broad. Finally, a measurement system that went beyond inputs and outputs, that focused on results not just on activities. Training manuals sprang up as did outcome consulting practices, and funders became transfixed by outcomes. Funding forms changed; newspeak evolved, software was created and before too long non profit agencies were faced with the new and, dare I say it, burdensome challenge of demonstrating their outcomes to funders.

This happened at such a rapid pace that most funders didn’t even have the time to develop their own system of measuring their own outcomes. And since then while funders are becoming increasingly results-minded, too many are still not sufficiently engaged in systematic, much less collaborative, outcome design and measurement.  I don’t know  if any one has studied the financial costs or the impact on capacity that the outcome wave caused  and is still causing, or for that matter if anyone will attempt to measure its own social return on investment. But I imagine many, if not most, non profit leaders would at least agree the “cost”  impacts have been substantial. Has it all been worth it? I wonder to what extent the embrace of outcome measurements have resulted in lost opportunities to be innovative.

Before moving on to SROI, let me clarify that I do believe in measuring results. I believe organizations of all sectors should be results-focused and find ways to measure success beyond just dollars. Businesses should do that, which is why there is a lot of hub-bub about the triple bottom line and an increase in Corporate Social Responsibility intitiatives among the major corporations in particular. Governments should value results more so than political perceptions of the ruling party they hope to effect with the public. (Yes, I know that sounds a bit naive to politicians or maybe I am too cynical?), and non profits should be expected to put some meat on the bones of altruism.

But sometimes I wonder sometimes if our approach to results and measurement starts in the wrong place – or at least should start in a different place. It may seem like a fine line, but instead of developing measurement systems that are based on “So, prove you make a difference to me” types of questions, we might be better off starting with, “What do we want to do together and why?” Yes, I know that the outcome and SROI literature would embrace this approach, but unfortunately I am not sure it is practiced that way to the degree it should be.

Instead of engaging community and stakeholders in the “what do we want to do and why question”, we have invested far more resources, thinking, time, and frustration in the business process and systems of outcome measurement, and I worry a little that it what will happen with SROI. I worry about it because people are already doing the “wow” thing about it and it is being implemented by groups around the world and locally too.  What happened to outcome measurement was that everyone did it differently, which meant there was no real opportunity to collect, review, and communicate system-wide or community-wide findings and more importantly tie pursued outcomes to the results being reported.

Jeremy Nicolls was bang on when he said we all subscribe to the same accounting methods. Our charts of accounts might be different but basically we all do accounting similarily enough to be able to understand finances and budgets across a wide spectrum of organizations and governments. That has not been the case for outcome measurement, and despite Mr. Nicolls obvious commitment to developing some standardized approaches to SROI, I am nervous it might not happen this time around either.

And while we need ways to inspire and craft results-driven initiatives in organizations in all sectors and then track progress against our aspirations, we need something bigger and better that is simulaneously simpler and more attainable that what we have now. Tall order. And if I knew how to fill it, I would and who knows maybe I would end up speaking to folks in England about it. (I hope you all have a sense of humour!)

from A Guide to Social Return on Investment

Yes, we have had community report cards, great trends tracking reports, stellar work from Stats Can and groups like Imagine Canada, but how often, if at all, can we definitively claim community efforts focused on aspirational outcomes were the primary reason for positive change? There are cases of course where major community efforts or collaborations can demonstrate influence on change. Edmonton’s Partners for Kids is one example of work undertaken by numerous groups and the school system that has resulted in higher performance of students.  And I also know this is an intiative focused on creating and measuring results.

We know school lunch programs help kids learn better. Foodbanks prevent starvation and/or help a single mother avoid having to decide between paying her utility bill or feed her kids. We know community services help seniors and persons with disabilities live in the community rather than institutions. Why do we have to “prove it” over and over?

Let me strip it down even further. If a child is hungry, we should feed the child. We know that is the thing to do.

We know we need our kids to succeed in school and that smart, prepared youth are good for our collective future.

We know the homeless need homes and jobs and that having such basic needs met is good for them, the community, and the economy. Anyone need another study proving that?

We know that living in community has more dignity than being institutionalized (note the stress on “living” – which means a whole lot more than “surving”). I surmise it costs less as well to support community living than encasing people in institutions, but even if it didn’t, we should still do it, shouldn’t we?

I guess what I am trying to say is that there is a whole bunch of work going on that we know is needed, impactful, and adds value not just to individual lives but to the community as a whole. There is countless research that tells us so and so much best practice out there none of us will likely be privvy to but a morsel of it. Let’s just get on with the proven work.

So, this SROI thing. I like the the term, “social return.” I like like other similar terms like “social innovation” and social entrepreneurship.” I am a little less excited about the  “on investment” part of SROI. A couple of reasons. First, the word, “investment” is so entwined with money, sounds so corporate, and makes me think of things like the abysmal GIC rates or how the stock market is doing. The use of the word doesn’t, on its own, persuade me to believe we are talking about “social value” as the predominant pursuit of the work we do.

Of course I understand why the word is used.  So do you. But as I perused the SROI guide I did see the interest in social value, but in the end it seemed to me – and maybe I am just missing the point – that stating the financial value of the social value is key to SROI. And you know what?  Maybe it is and should be. I guess that is the debate I am having with myself.

Some of the problem is not with the method but how the results of the method can be co-opted. For example if the SROI of one project is $5.6:1 – meaning for every dollar invested, $5.60 of “value” was created, what will a funder think of a ration of 4:1 or 3.25:1 and so on. Will the work result in what I call fabricated benchmarks like administration costs should never exceed 15 or 20%? Or that fundraising costs should never exceed a certain percentage?

Maybe I am too namby pamby (though I can’t recall ever being accused of that) but what about the social value of just giving a damn, the social value of caring about others, the social value of sharing your assets with those who don’t have them? I don’t need evaluations about the social return on investment of feeding hungry people or housing a homeless youth. I would like organizations to have as much capacity as possible to do such work well rather than spend time proving to me the merits of feeding the hungry or housing the homeless. In fact, at the risk of going full circle, in these kinds of programs I actually do think a telling measure is how many people can be fed (and fed well) for the money provided. So, in other words, tell me the output in relationship to the inputs. Does that make me old school?

I am certainly not trying to be discouraging or critical of the thought leadership and talents of Jeremy Nicolls and folks like him. They are trying to forge new ground and I do know that what he and others are doing is much, much more difficult than writing a blog posting like this one. And I will grant you of course – and I am sure Mr. Nicolls would agree, SROI is a developing science and art. It is far more complex than adding up numbers, and it has and will have its gray areas.

So as we move forward in this direction, how do we avoid the pitfalls that tripped us up with outcome measurement? How can we apply community development principles to the nurturing of this tool in a way that creates common approaches to its design and development?  How can SROI thinking and practice be incorporated into organizational work without becoming  one more drain on the capacity to deliver mission?

To funders from all sectors, I suggest don’t adopt SROI and force non profits to engage in it yet,  but help to fund its development in and with community and be open to what such engagement reveals. To the SROI thinkers and practionners, I suggest we need to stop measuring things we don’t need to anymore and where we do need to measure seek out optimal design that is accessible and simple and doesn’t become one more administrative or operational burden that further restricts the ability of non profits or other groups to do their work.

My personal (and perhaps unpopular or just plain wrong) opinion is that the outcome dance has had its good moves, but overall it has too often steered activity and dialog to one of compliance rather than inspiring engagement around common aspirations and true partnerships across sectors.  How many executive directors end up having to be “creative” in order to fit their work into outcome terminology and expectations that when you strip away all the lingo are fuzzy or unrealistic or, in some cases, just a new way of describing activities?

As well the way we have danced the outcome dance has involved some missteps that we can correct with practice. Outcome approaches to innovations and corresponding measurement of those outcomes make sense. Testing a new approach or program deserves our attention to see if a pilot of a concept should be expanded.

There is an excellent example of this you can read about in a study called Women Building Futures: Journeywoman Start Program, Social Return on Investment Analysis.  It is a product of a consulting colleague , Anna Bubel (of Another Way), and two City of Edmonton staff, Jenny Kain and Karen Kerr. Through the use of the logic model and SROI analysis, this study clearly demonstrates the overall social value of the initiative. It was a study of a small number of women but the results indicate the model behind the program has merit and should be rolled out on a larger scale. And as its scalability is tested, I would suggest further evaluation would be a good idea.

But two things. There comes a time when a proven service model doesn’t require incessant evaluation over and over. Occasional evaluation yes, but not the kind that becomes little more than filling out a form. Subjecting organizations to incessant evaluation about everything actually, in my mind, thwarts innovation. Maybe my second point is just a minor one. It just seems to me that this excellent report is actually one that demonstrates how outcome evaluation and measures can work if done right. If adding SROI language and tools to that picture help make the model better, so be it. I guess I just don’t see SROI as being something new or radically different from a good outcomes evaluation.

If SROI has the promise so many think it does, its promise will be revealed in the practice of it within the bigger picture of sectoral collaboration and a commitment to community development. How inspiring it would be to see more funders lead the way in supporting that big picture development rather than adopt yet another measurement tool.  And how respectful it would be of the stellar leadership and actions of people in the non profit sector to stop asking for proof of value year after year through reporting systems that vary across government departments and other funders.

And one last word (for now):  whatever system of measurement is used, commitment to the measurement of results should carry with it an acceptance of those results and then the future nurturing of those actions and programs that produced them. Cutting childcare programs or school lunches or programs that free women of abuse despite the results and evidence that indicate their social and  financial value renders measurement to be irrelevant in the end, not to mention a demoralizing waste of talent and money.

I encourage you to read more about SROI. I gave you the link to the SROI guide earlier. It is worth the read. I think there is something there to be honest we should be pursuing but just not like we did before with outcomes. Here is another  link of interest.

Social Enterprise Fund – this is a great example of local funders (the Edmonton Community Foundation, the City of Edmonton, and the United Way of the Alberta Capital Region) coming together to facilitate social enterprise in our community.

2 thoughts on “Is SROI another bandwagon?

  1. Thank you for your excellent comments and insights about SROI! You have captured many of the concerns and interests related to the development and use of SROI.
    As a funder of preventive social services, FCSS Calgary has supported the capacity building of our funded agencies to complete SROI cases. We recognize SROI as an excellent tool to support organizational development, program evaluation and improved communication about the social value created by our funded agencies. We DO NOT intend to make this a mandatory reporting mechanism. You can find an overview of our SROI efforts and 13 cases posted on the FCSS Calgary website at
    With ever-increasing demands for improved accountability in a climate of funding cut-backs, working in partnership with our funded agencies to balance evaluation and accountability with tools to help demonstrate/communicate the social value/social impact of preventive social services is critically important.
    Additionally, we have been working with our colleagues in Edmonton to develop agreed upon standards of practice, robust financial proxies from citable sources and exploring the use of third-party assurance of SROI cases to ensure the rigor of the methodology and to decrease the misuse of SROI. This is an evolving methodology/tool and we hope you will continue to have a critical eye on the development and use of SROI within our province and across the country.


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