Do you want to measure your organisation’s social impact? Here is our step-by-step guide to creating your first report.
1 Establish the scope
At this stage you decide what you are going to measure and report on, what the purpose of this is and who will take the lead on impact measurement in your organisation. When deciding what to measure and report on, think about projects/services you would like to showcase, areas where you are not sure if you are achieving what you set out to do, areas where you would like more data to help with decision-making or new activities you are starting where you could start recording data in a new way from the beginning. You could also look at an area where you have lots of data already as it would make the process of producing a report relatively straightforward.
In terms of purpose – is the reporting for internal use, marketing, to share with your beneficiaries, for a funder/commissioner or investor or a combination of these?
Identifying a lead person is crucial to ensuring that the work actually gets done, but it is best to have a group of individuals with responsibility for different elements.
This stage is crucial because you need to make sure it is manageable and achievable. Don’t try and measure and report on everything if you have never collected any data before!
2 Identify your stakeholders
The next step is to identify the key stakeholders you will consult with and obtain feedback from. As this is your first time, I recommend 3-4 stakeholder groups as a maximum, otherwise it can become too complicated. These might be staff, volunteers/Board members, clients/beneficiaries and key partners.
3 Map your outcomes (theory of change)
At this stage you identify the change that happens, taking you through the process:
4 Data collection
You then collect data from each of your stakeholder groups to evidence the outcomes you are achieving. This can be through existing forms/questionnaires, focus groups, surveys etc. The key part of data collection is to ask what difference the service/activity has made to them and what has changed in their life.
5 Assign values
Once you have collected the data from your stakeholders you then assign financial values (proxies) to the outcomes. This is particularly useful for soft outcomes, such as increased self-esteem, which does not have a specific monetary value. For hard outcomes, such as employment, financial proxies are used and are easier to calculate as there is a monetary value for the wages the individual receives and any benefits they no longer receive. For the valuation of the outcomes, the financial proxies used to give a monetary value have included three different types:
- The cost of negative outcomes avoided, e.g. health care costs avoided, benefit costs avoided
- Actual spending on similar outcomes, e.g. the cost of improving confidence by attending a confidence course
- People’s Willingness to Pay which asks people to hypothetically assign a value to an outcome, e.g. how much an individual would be willing to pay for improved wellbeing
6 Identify your impact
At this stage adjustments are made to the financial values to identify the part of the outcome you can claim as being achieved by your organisation (i.e. your impact):
- Deadweight – this represents the number of outcomes that would have been achieved anyway without your organisation’s support.
- Attribution – this is an adjustment for the contribution of other agencies to the achievement of the outcomes.
- Drop off – this is an adjustment for outcomes that will not be sustained.
- Displacement – this is an adjustment for other activities that have been displaced as a result of your organisation’s activities.
7 Calculate SROI
Once you have made these adjustments to the financial values, you take the total impact and divide this by the cost of delivering that activity or service in order to calculate your SROI. This gives you a monetary value of £xx for every £1 spent on the service.
8 Report
After calculating your SROI then share the findings in a report. Look back at the initial stage and make sure the report or way it is published is appropriate for the audience you identified then.
9 Embed
Once you have the data from your first SROI report think about how you can embed the stages across other areas of your work, and also use the information and findings to continually improve your delivery. The key aspect of SROI is not having a number but using the information to help decision making and to improve the outcomes you achieve.
• Heidi Fisher is a business mentor and trainer who helps social enterprises grow and measure their social value. She has recently published a book, How to successfully set up and grow a social enterprise, which is available to download.
