I can almost hear the groans from here!
Yet another fad that will take up your precious time. Some more work to do when you are already stretched.
There have been many new concepts over the last few years that have promised to transform third sector organisations and have done little more than lined the pockets of consultants. I've seen them all and watched organisations waste time and money but I would like to make the case for you to seriously consider investigating SROI (Social Return on Investment) as a way of dramatically improving your organisations performance and ability to raise financial resources.
What Is SROI?
SROI is the acronym for Social Return on Investment, a relatively new and interesting tool for communicating the value of your nonprofit’s impact on the community.
According to The New Economics Foundation, SROI “captures social value by translating outcomes into financial values.”
SROI shows the double bottom line: the financial impact AND the social impact of your organisation's work.
SROI helps you determine the cost of what would happen if your organisation did not exist.
Watch the video for a little more information
And that's important because?
Well put simply, isn't that the reason you exist - to make a difference?
It's great to be able to tell the story of how your work transforms lives but how much more powerful is it to be able to be able to demonstrate the financial and social impact of your work and translate that into monetary terms - such as "for every £1 invested in us we generate £5.70 in return".
Or to be able to say "that without our organisation undertaking this work, the cost to the public purse would be £1m" - pretty powerful stuff!
Turning SROI into Talking Points
As esoteric as calculating the SROI seems, it's pretty easy to translate into ways to communicate your nonprofit’s value to grant makers and other supporters.
For instance, you can translate your SROI into messages like these.
Every £1 invested in CERT saves £7 community resources.
Program XXXX is more sustainable/better/has a greater impact than other programs because of [insert SROI].
If CERT’s work prevents the loss of just one teenager to drugs, it saves our community [insert SROI] in health care and lost productivity [and other areas where social costs are avoided or benefits gained]. It also saves the life of one precious child [insert picture of precious child.]
Use the SROI as part of your persuasive, logical argument for funding. You can use images, graphics, or infographics to make your funding appeals dramatic. Use this messaging in reports, case statements, direct mail campaigns, media campaigns, and social media.
Why You Should Care about the SROI
In a world where the grant seeking competition has never been greater, calculating your SROI can give you a competitive edge.
How? It illustrates the four facets of your organisation that are important to any donor, contract giver or grant maker.
Your credibility – your nonprofit knows how to communicate impact
Your capacity – to invest resources in calculating the SROI
Your evidence – the SROI proves that you collect and manage data know how to interpret that information to sustain your work
Your sustainability – the SROI is a phenomenal communication tool for fundraising (especially with donors or grant makers in the financial sector),
It will help you to better understand your stakeholders and vastly improve the management of your organisation
How will you use SROI to raise more funds for your nonprofit?
CERT Consultancy are able to offer full support in the development of systems to capture and report SROI and can train your staff to undertake the work themselves if desired. We also offer a review service to ensure that the SROI that you gather has an external review.
If you would like an informal chat about how we can help you contact Neil King on firstname.lastname@example.org to arrange a call.