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A funny thing happened on the way to the (Social Finance) Forum

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Editor’s Note: CharityVillage is pleased to be a media sponsor for the Social Finance Forum taking place in Toronto this month. Benita Aalto will be attending and sharing her thoughts and insights with CharityVillage readers. Below are her initial musings on the concept of Social Return On Investment, as well as a preview of what to look forward to at the Forum.

Full disclosure: I have knee-jerk mistrust of anything that has a whiff of corporatization, particularly when it comes to nonprofits. Mention “revenue streams” or “monetization” and a red mist falls over my eyes, and I regain consciousness days later, clutching a heavily underlined copy of Das Kapital.

Which is why I was a bit concerned to hear about the upcoming Social Finance Forum in Toronto on November 8 and 9, particularly its workshops about the concept of Social Return on Investment (SROI). This is just great, I thought: yet another sneaky way that corporate-speak is infiltrating nonprofits, by turning charitable donations into an “investment” that requires a fiscal “return” – as if social good is just another widget to be manufactured.

Fortunately, before another red mist descended, I had the chance to speak with Stephanie Robertson, president of SiMPACT Strategies Group and acting CEO of SROI Canada. She points out that, when thoughtfully applied, an SROI analysis can actually change the story of a nonprofit’s impact from being solely about its cost to its value – the former being often easier to quantify than the latter and something that Robertson believes SROI can help change.

Credit where it’s due

“Nonprofit agencies get absolutely no credit for how they reduce stress on systems that are stressed, stretched and oversubscribed,” says Robertson.

“Someone working effectively with homeless youth means there is less stress on police and social work, so those resources can be used elsewhere.”

Undertaking an SROI analysis can highlight, in terms that funders and bean-counters can understand, the fiscal impact outside the nonprofit’s walls.

What is SROI?

In its broadest terms, SROI uses accounting tools and program assessments to communicate how an organization is using its financial resources to create social good.

“When you invest in crime prevention or education or elementary school nutrition it’s not the same as investing in a road,” says Robertson. “SROI is a tool to represent the value that would be undervalued, overlooked or misunderstood.”

Robertson, who is based in Calgary, Alberta, with an office in Toronto, is one of only three SROI practitioners in Canada to be accredited by The SROI Network in the UK. (She and SROI Network chief executive Jeremy Nicholls will be giving the closing keynote on the first day of the Social Finance Forum.)

SROI is just getting attention in Canada but has been developing in the US since the early 1990’s, and in the UK since 2003. SROI is also attracting more attention in the UK with the recently passed Public Services (Social Value) Act 2012, which requires that “public authorities have regard to economic, social and environmental well-being in connection with public services contracts”.

Is it becoming mandatory in Canada? According to Robertson, no, though she notes that some HRSDC applications she’s seen have had an SROI option.

“Nonprofits were encouraged for years by their funders to report on activities, and now they’re being asked for outcomes,” she says.

“Outcomes-based evaluation is different from activities evaluation. It takes a different skill-set to assess whether people got what they wanted.”

Check out the helpful SROI Primer prepared by Robertson and Nicholls for London Business School in the UK. You can watch the video or read the transcript and PPT slides by clicking on the Transcript link at the top of the page.

Let a smile be your SROI?

“You can create social value by smiling at somebody, but that is not the same thing as monetizing value,” says Robertson. “Which outcomes can we convincingly and creditably monetize?

“Some changes are not that difficult to calculate. A client could say that, as a result of taking part in a nonprofit’s program, their income has increased, for example, or they’re not going to the hospital as much and so are not paying for transportation and medication. Plus, the hospital now doesn’t have to use those resources for that client; they can be used for someone else.”

Robertson points out the need for activity-based (or “output”) data collection, such as how many people take part in your program, but also change data from the clients themselves.

(Click here to read an SROI analysis done for Family & Community Support Services for the City of Calgary.)

“You need output data that shows people are coming but you also have to ask them if they got what they needed,” she says. “It’s actually amazing that programs are delivered and the clients are never asked if they got what they wanted. If you don’t have that information, your ability to create value will be reduced because you’re not hitting your mark.”

What else is intriguing at the Social Finance Forum

Thursday, November 8

CBC’s Dragon’s Den entrepreneuse Arlene Dickinson will be part of a panel addressing the topic of impact from an investor’s point of view. (And I hope someone asks her if that’s Kevin O’Leary’s real hair…)

Two interesting-sounding workshops for newbies: in the morning, “Made to Measure: Tools and practices” which is an overview of the daunting, alphabet soup of methodologies (GIIRS, IRIS, and yes, SROI); and, in the afternoon session, “Communicating your value”: how to articulate the change your organization is making to your community and to investors.

The full list of presentations and workshops is here. Click on the “download PDF version” text link: the PDF of the schedule has symbols that show who the best audiences are for each session, such as investors, asset managers, nonprofits, everyone etc.

Friday, November 9

I’m keen to hear Toby Heaps talk about the launch of the Council for Clean Capitalism, started by his Corporate Knights media, research and financial products firm. Heaps sounds like an interesting character: check out the This Magazine profile of his time as Ralph Nader’s campaign manager in the 2008 US presidential race.

The afternoon program features a session called “The million-dollar question” about valuing outcomes using “available financial proxies and other quantitative factors”. Currently, the only word I understand in that phrase is the “and” – but I’m confident that by the time that session comes around, I’ll be well-versed from the sessions I attended on Day One and will be nodding my head sagely.

See you at the Forum!

Benita Aalto is a writer and communications consultant with extensive experience in corporate communications as well as in print and broadcast journalism. She has been a featured guest on TVO, CTV, CBC Newsworld, and CBC Radio, among others.

Photos (from top) via iStock.com and The Salvation Army. All photos used with permission.

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