Social Return on Investment

Transcription

1 Social Return on Investment

2 At EY, we understand the value and impact of our clients social investments. But on most occasions the value generated from these investments cannot be captured under traditional economic and accounting terms. A prima facie cost analysis of any social investment will only highlight a cost component and will almost certainly fail to capture any return on these costs. This is why we have developed our capabilities and developed methodologies and approaches toward measuring the return on our clients social investments. Social Return on Investment (SROI) is an alternative accounting and economic analysis that is capable of measuring the wider concept of value generated through social investments, which takes into account social, economic and environmental factors. s: Expected net present value (ENPV) and expected internal rate of return (EIRR) helps in highlighting the cost effective and high social return activities and projects; Helps in choosing projects/activities and streamlining existing project and activities. Furthermore, helps in developing communication material directed toward raising funds for these projects/activities. limits within which the project/activity will have maximum limits to the design framework of the project/activity under analysis. Assumption-based modeling provides early signs of risk for the project/activity; Helps in identifying risks attached to planned and ongoing projects. Cost component and social return analysis provides insights into the unique and innovative aspects of the project/ same; Helps in informing shareholders, trustees, potential and effectiveness with which the project/activity is being SROI provides a monetized summary of project s reach and impact; Helps in communicating the monetized value of the project/activity s reach and impact in a concise manner.

3 Forecasting: An SROI forecast can help in making a more informed choice of the activities/projects/programs that an entity should select to implement as a part of its social initiatives. An analysis of the variation in SROI against subtle adjustments to cost components can help in identifying areas of risk or improvement in the activity/project/program design. Therefore, an SROI report can form the foundation of highlighting the potential of the activity/ project/program under consideration and can therefore help in raising funds for initiating or expanding the same. Evaluation: which a social initiative has been planned and delivered. A sensitivity analysis of the SROI against the cost of the initiative can provide a broad direction towards streamlining the initiative over the years to come. The process of deriving the SROI, the in-depth reports that can be used to reach out to the entire spectrum of stakeholders who need to be informed about the Our approach toward estimating SROI: Establish scope and identify stakeholders Attach values to outcomes SROI Embedding SROI in reporting, formal communications and fund-raising material At EY, we have an experienced pool of professionals. We have strived to create a team that can provide an optimum combination of functional and technical domain sets. Our considerable pool of resources includes professionals who have experience of working on an array of social sector themes. These professionals will work in tandem with the team s our clients social initiatives and philanthropic philosophy as a central construct to any tabulation, calculation, estimation or extrapolation.

4 Select credentials be generated by a low-cost sanitation project: We were approached by a funding agency for technical support toward designing a consumption subsidy-based project/program that would encourage households in a tier II city to construct toilet facilities within their premises; it was looking for a comprehensive project concept, which would include a detailed SROI expected from the project. The SROI computation, along with the project design, was subsequently used by the funding funds. training initiative run by a leading real estate: Our client approached us with a volume of information and data pertaining to a skills training initiative it was running as a part of its CSR initiatives and wanted our help in determining the CSR activity s data and information available with the client and some basic CSR activities through SROI. The SROI computation was made via EY s in house approach and the recommendations provided in our summary report helped the client in streamlining its CSR Select case studies Using SROI to select between two CSR activity proposals directed at supporting school going children in Bihar: A leading FMCG company was in the midst of deciding between a nutrition supplement for the government run mid day meal scheme and the second sought to provide teacher training toward improving the quality of education. Faced with a limited budget and the necessity to choose between the two proposals, the company used an SROI forecasting approach to determine from each activity. All expected outputs were monetized SROI. Based on the comparison appropriate decisions were undertaken. When a corporate foundation decided to upscale its social initiatives, it decided to entities and private donors. The corporate foundation work, which included a thorough impact assessment. However, the foundation s efforts found limited success. The foundation redrafted its pitch after including a heavy SROI component. The revised pitch helped it raise the money required for up scaling the foundation s initiatives. The revised pitch found an increased support among corporations, since it clearly highlighted a more tangible value of the foundation s work.

5 and build an appropriate solution Thematic area: Child rights Education Gender and inclusion Natural resource management Public health Skill development and livelihood Water and sanitation Other SROI analysis points: Choosing between prospective social sector initiatives Direction towards streamlining existing initiatives Areas of risk for the activities under the initiative Reporting and communication material for the initiative Promotion and fund raising material for the initiative Choosing between implementing partners Other Organization reports/data Primary data collection Tabulation type: Static spread sheet Fluidic spread sheet Other Final report: Slide deck report Publisher report

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