Printer Friendly
Measurement Philosophy | Summary of SROI methodology | Data collection and calculation
Key challenges | Performance levers | Next steps | Portfolio reports
SROI presentations | Background
 
     
   
   
 

Improve our SROI analysis

Although we have undertaken SROI reporting at five of our portfolio companies, we still have a great deal of learning to do around the interpretation our results. Most importantly, we have yet to determine a hard and fast rule regarding what makes a good or bad SROI.

As we gain more experience with SROI we are developing some key beliefs about the relative socio-economic value being created. In a nutshell, these beliefs are:

  • We cannot establish a ‘good’ SROI for social enterprise in isolation of other models with the same mandate using the same measurement methodology.
  • We can establish a common SROI reporting template within our portfolio to assess what is working and what is not.
  • We can determine if we are improving within specific investments based on the SROI index of return.
  • We can develop an intuitive sense of what is ‘good’ by equating what we see as our successes with a particular SROI result.

Building on these key beliefs, our plan is to continue developing our own expertise in performing SROI analysis within our portfolio, while simultaneously looking for trends and comparisons that might provide further insight on performance benchmarks.

In the meantime, our hope is that others will engage in this process, creating benchmark data for comparative purposes and allowing for more rigorous discussion regarding what constitutes a ‘good’ SROI.

Make SROI easier and more accurate

At this point, our SROI methodology is time consuming and resource intensive. We believe that in order to ultimately make this an easier and less resource intensive process, we need to continue on this path for another two to five years to learn where we can use proxies versus where customization is required. For example, if we know that 70% of a particular target group will stay employed once they have been employed for a year, we can use this proxy in our calculation and avoid a costly, time consuming follow up process with past target employees.

Ultimately, we also want to extend this process beyond the SCP investment portfolio and to establish a SROI tool that other social enterprise operators and investors may find useful.

To help lay the groundwork for others to use a SROI template similar to what we have established, we have tasked ourselves with trying to improve the accuracy of the various projections made in this equation. Moreover, we hope to streamline and improve the methods by which we collect data in an effort to make SROI reporting more user-friendly.

In order to accomplish these goals and create an easy to use SROI tool we will do the following:

  • Refine the variables in the equation - determine which variables are easy to account for and which ones are not.
  • Continue to work with our portfolio of investments to create more streamlined and easy to implement methods of collecting data for the SROI calculations.
  • Determine which elements lend themselves to universal proxies – or best estimates – and which ones require customization.
  • Find and utilize these proxies in order to streamline the data gathering process and deal with externalities that are difficult to quantify through primary data collection. (e.g. incarceration costs, health care costs, rates of recidivism).

We hope that through these efforts we will not only create a tool useful in our own portfolio but one that is useful to other social enterprise managers and funding organizations.