Social Return on Investment

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.

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.

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.

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.

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

Ahmedabad2nd

Near C.N. VidhyalayaAmbawadiAhmedabad - 380 015Tel: + 91 79 6608 3800Fax: + 91 79 6608 3900

Bengaluru12th & 13th

“UB City”, Canberra BlockNo.24 Vittal Mallya RoadBengaluru - 560 001Tel: + 91 80 4027 5000 + 91 80 6727 5000 Fax: + 91 80 2210 6000 (12th

Fax: + 91 80 2224 0695 (13th

1st Floor, Prestige Emerald No. 4, Madras Bank RoadLavelle Road JunctionBengaluru - 560 001Tel: + 91 80 6727 5000 Fax: + 91 80 2222 4112

Chandigarh1st Floor, SCO: 166-167Sector 9-C, Madhya MargChandigarh - 160 009 Tel: + 91 172 671 7800Fax: + 91 172 671 7888

ChennaiTidel Park, 6th & 7th Floor A Block (Module 601,701-702)No.4, Rajiv Gandhi Salai, Taramani Chennai - 600113Tel: + 91 44 6654 8100 Fax: + 91 44 2254 0120

Hyderabad

Hitech City, MadhapurHyderabad - 500081Tel: + 91 40 6736 2000Fax: + 91 40 6736 2200

Kochi9th Floor, ABAD NucleusNH-49, Maradu POKochi - 682304Tel: + 91 484 304 4000 Fax: + 91 484 270 5393

22 Camac Street3rd

Kolkata - 700 016Tel: + 91 33 6615 3400Fax: + 91 33 2281 7750

Mumbai14th Floor, The Ruby29 Senapati Bapat MargDadar (W), Mumbai - 400028Tel: + 91 022 6192 0000Fax: + 91 022 6192 1000

5th Floor, Block B-2Nirlon Knowledge ParkOff. Western Express HighwayGoregaon (E)Mumbai - 400 063Tel: + 91 22 6192 0000Fax: + 91 22 6192 3000

NCRGolf View Corporate Tower BNear DLF Golf CourseSector 42Gurgaon - 122002Tel: + 91 124 464 4000Fax: + 91 124 464 4050

6th

18-20 Kasturba Gandhi Marg New Delhi - 110 001Tel: + 91 11 4363 3000 Fax: + 91 11 4363 3200

4th & 5th Floor, Plot No 2B, Tower 2, Sector 126, NOIDA 201 304 Gautam Budh Nagar, U.P. IndiaTel: + 91 120 671 7000 Fax: + 91 120 671 7171

PuneC-401, 4th

Panchshil Tech ParkYerwada (Near Don Bosco School)Pune - 411 006Tel: + 91 20 6603 6000Fax: + 91 20 6601 5900

Ernst & Young LLPEY | Assurance | Tax | Transactions | Advisory

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

Ernst & Young LLP is one of the Indian client serving member firms of EYGM Limited. For more information about our organization, please visit www.ey.com/in.

Ernst & Young LLP is a Limited Liability Partnership, registered under the Limited Liability Partnership Act, 2008 in India, having its registered office at 22 Camac Street, 3rd Floor, Block C, Kolkata - 700016

© 2013 Ernst & Young LLP. Published in India. All Rights Reserved.

EYIN1308-059 ED None

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither Ernst & Young LLP nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.

GM

Executive Director & Leader Development Advisory Services EY India Tel: + 91 124 457 5178E mail:parul.soni@in.ey.com

Senior Manager, Development Advisory Services, EY India Tel: + 91 124 612 1156E mail:vijay.ganapathy@in.ey.com

Manager, Development Advisory Services EY India Tel: + 91 124 614 1155Email:gaurav.bhargava@in.ey.com