1. © nef consulting Value for Money (VfM) in international development: useful elements of Social Return on Investment (SROI) Michael Weatherhead nef consulting (new economics foundation) 23 rd November 2010

2. © nef consulting “Wider social and environmental costs and benefits for which there is no market price also need to be brought into any assessment. They will often be more difficult to assess but are often important and should not be ignored simply because they cannot easily be costed.” HM Treasury Green Book 1.Effectiveness, not lowest cost 2.Wider costs and benefits 3.Whole-of-life costs Treasury VfM Definition

3. © nef consulting Value for Money Money Environment People Inputs Outputs Resources / Investment Resources / Investment Service & Wider Outcomes Service & Wider Outcomes Economic Environmental Social Often VfM is understood by comparing unit costs Often VfM is understood by comparing unit costs Real VfM is achieved by comparing outcomes with investment Real VfM is achieved by comparing outcomes with investment

4. © nef consulting How does SROI fit in? Framework for telling us how effectively money is spent – make VfM decisions Adjusted form of cost-benefit analysis. SROI = value of positive + negative outcomes investment (or cost) Essentially a measure of the efficiency of achieving outcomes It considers triple-bottom-line benefits and investments – economic, social & environmental

5. © nef consulting Taking a lead Stakeholder informed in development of: –Theory of change (logic model) –Understanding of outcomes –Understanding of value of outcomes –Understanding of impact considerations Inclusion of these considerations builds a case to put to any donor

6. © nef consulting National Accounts of well- being

7. © nef consulting Understanding impact Deadweight: what would have happened anyway? Attribution: how much is down to this project, and how much down to other factors? Displacement: have we just moved an outcome to / from somewhere else? Benefit period: how long does the outcome last, and does the effect ‘drop off’ over time?

8. © nef consulting Impact: Attribution Attribution – how much credit can your organisation take for the outcomes? –Expressed as a percentage –Not an exact science Methods: –Based on your understanding of the journey of change –Involve stakeholders – interviews or surveys –Consult with other organisations

9. © nef consulting Attribution stages 1.No account of attribution levels Effectively attribution = 100% 2.Informed estimate of attribution levels Qualitative research allows SROI practitioner to divide attribution between contributors 3.Quantitative research Quantitative stakeholder research gives average stakeholder’s view on contributors 4.Academic research Academic research can help refine (although not replace) stakeholder research

10. © nef consulting Partnership working