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WRITTEN ARTICLE ANALYSIS

Works Cited:
http://www.neweconomics.org/programmes/valuing-what-matters
NEF. Measuring social impact: the foundation of social return on investment (SROI).
SROI Primer,
2004, 1-12.
NEF. 'Social Return On Investment: Valuing what matters.` 2004, 1-32.

The following is a brief outline of measuring social impact in regards to social entrepreneurship (according to
the resources listed above):
Social Return on Investment (SROI)- value of the social/environmental impact in
financial terms
4 main elements needed to measure social value creation
1. Inputs - resources invested
2. Outputs - direct/tangible products from the venture
3. Outcomes - changes to people resulting from the venture
4. Impact = Outcomes minus estimate of social benefits that would have occurred
anyway
Reasons to measure Social Return on Investment:
Improved program management
understanding of the impact of your work
communication of the value of venture to stakeholders
SROI Dissemination to stake holders
Consult with them (where possible) to identify common priorities
Measure progress towards achieving objective
Understand how stake holders objectives match or conflict with entrepreneurs
objectives
Tell stakeholders what is going well, where improvement is needed, and future goals
Points to consider
Measure outputs in accordance to venture objectives
Accounting for stakeholders priorities/perspective can lead to measuring the
best/most appropriate constructs
Government statistics and other data can be used to calculate how you create social
impact
New Economics Foundation (NEF)-Aims to develop a methodical and objective
approach to measuring SROI
NEF is redefining the way we understand and measure progress: finding ways to make the invisible value of
things which are essential to quality of life visible and measurable, in short valuing what matters.
In a specific instance, NEF developed a tool to measure SROI for Roberts Enterprise
Development Fund (REDF). They measured the SROI via the blended value approach:
1. Takes the economic and social cash flows from a venture over a number of years.
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2. Converts the cash flows that occur in the future into a present day value.
3. Adds up the present day value cash flows to calculate to an enterprise value and a
social purpose value.
4. Combines these to give a blended value.
y Report on the whole process, not just the numbers:
The blended value is presented within a broader report that takes
account of risk factors and impacts not included in the numbers.
The report is modeled on an investment analysts report for for-
profit companies that describes:
y the venture
o Summaries of ventures past and planned business
and social initiatives
y venture performance
y impact and potential (based on a range of factors and
measures)
o The full range of social and economic outcomes and
performance measures including information on
employees
o Ventures employment risk profile
o Accounts of some of the hard-to-quantify changes in
individuals

QUESTIONS/CHALLENGES TO THESE POINTS
y In making the assumption that social returns have a financial equivalent - is it
undervaluing the benefits of social return (ie: a life saved = a given amount of
money)?
y NEF SROI APPROACHES (ie: REDF approach): Because of the complex and
novel nature of REDF's approach, do you think the values determined must be
prefaced with an elaborate explanation of the approach thus reducing the
applicability of the results only to those who familiarize themselves with the
approach?

PERSONAL APPLICATION
I really like the idea of trying to quantify subjective matters in order to pursue
decisions/communicate the value and worth of a venture. This allows for a bolstered
commitment to the social impact part of the venture (as opposed to the financial part)
because there is tangible, objective, proof of an impact. SROI also allows stakeholders who
are not well versed in social ventures to analyze the venture in a similar manner as more
typical, non-social ventures (ie: cost-benefit analysis).
Because my idea for a social venture is not yet fleshed-out, my approach for measuring
the social impact of my venture is yet to be determined. If I am to create a self-management
venture, I will refer to past research to find evidence-based measurement tools. However, I
think it is important to note that in the health-care world, international research is limited in
applicability because funding/government costs is an entirely different entity from Americas.
In terms of measurement, a self-management venture is a form of intervention, thus I
can refer to evaluations and measurements (administered pre/post to participants) that
already exist in clinical and medical worlds.