Turning insight, evidence and ideas into action

Return on Investment

What does a better future look like?  Whether you are developing an Apprenticeship programme, delivering a training course, operating a library or getting young people to participate in sport to a greater degree, a better future is one in which your investment delivers a positive return – put simply, you get more out than you put in.

Of course, that ‘more’ could take many forms – depending on your project or initiative, return could be economic, social, or environmental.  Skyblue offers a range of tools which can be used on their own or as part of a wider consultancy and / or evaluation package.

Social Return on Investment


Social Return on Investment (SROI) is a series of principles for valuing the difference that activities make.  By following those principles we are able to look across a range of stakeholders and value not only economic, but also environmental and social change.  SROI is a particularly effective tool for identifying and valuing not only the outcomes that you expect and intend, but also those that you don’t.  2015 will see Skyblue complete our first SROI Network assured report.

SROI is a tool that can help you to make decisions, to communicate your value internally and externally, and to help understand the context around your activities better.  Whether as a standalone piece of work or part of a wider evaluation, it is increasingly language which funders and government are keen to see.

 

Principles of SROI

Understand what changes
From the start identify who the people are that either create or receive value (the stakeholders).  Work with them to identify what changes for them – not just the changes that were expected before the start
 
Involve stakeholders
Stakeholders are involved at all stages – in identifying the valuable outcomes, in measuring the extent of change, in putting values to that change, and in identifying what might have happened otherwise
 
Value the things that matter
Use financial proxies for indicators so that value can be expressed in terms that are easily understood
 
Only include what is material
Identify whether change is relevant and significant and only include the change that is
 
Do not over-claim
Ensure that the context of change is understood – how much of any change is directly attributable to your intervention?  What would have happened without it?
 
Be transparent
Show your working and explain why you have made the decisions you have made around valuing outcomes
 
Verify the result
Ensure appropriate independent verification of the account

Cost-Benefit Analysis


"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." Mr Micawber in David Copperfield, Charles Dickens (1850) 

Mr Micawber’s assessment of a good rate of return may not tally with your own, but the idea that any programme, job role, initiative or scheme should create more value than it costs is at the heart of all successful businesses.  Skyblue have developed an approach to cost-benefit analysis which hinges on identifying all the key stakeholders and examining honestly all the costs to them and all the benefits they accrue, in order to formulate an analysis in which you can be confident.  This analysis can then be of use in:

- Securing funding from internal or external clients

- Identifying key areas for improvement

- Making decisions about future areas for investment 


Example

Skyblue have developed an approach to examining the costs and benefits of Apprenticeships in a range of different sectors, including nuclear, manufacturing, and social care.   This involves not only looking at the costs and benefits today, but also projecting ahead to look at the value of an Apprenticeship after the Apprentice has finished.

 

 

Testimonials


“Through our partnership with Skyblue and Envoy and our own personal development we have not just been able to produce our own impact work and utilise it on a regular basis to inform developments but also to influence the impact measurement vision for the sport for development sector.”

Emma Atkins, Chief Executive Officer, Dame Kelly Holmes Trust

SROI Video produced for the Dame Kelly Holmes Legacy Trust

Watch the SROI Video