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.

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

 

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.   

SROI Video produced for the Dame Kelly Holmes Legacy Trust

Watch the SROI Video

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.

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