www.bakertilly.co.uk

The Value of Social Impact Measurement

Keith Ward Head of Social Impact Services

10 July 2014

Topics to be covered

• Setting the Scene• How have we got here?

• What is social impact?• Understanding the concept

• How do we measure it?• An overview

• Is it worth doing it• Why measure it?

• PbR and Social Investment• Additional benefits

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Setting the scene

Why are we considering social impact?

• Because it is something you deliver very well

• Because of legislative change: i.e.. Public Services (Social Value) Act 2012; England only but debated by the Welsh Government

• Because it helps you demonstrate value for money

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Inputs Activities Outputs Outcomes Impacts

What is it ?

• What change/outcomes does your work achieve• short / long term

• Understanding how that change is achieved• What did you do?

• And for whom• direct and indirect beneficiaries

...who benefits and how?

...focus your resources on maximising that change 4

Primary Secondary

Benefits of SROIFor example; As a result of your support to retain their tenancy a tenant may

recover from mental health issues;

• An individual may be able to regain independence

• May be able to come off some medications

• They may be able to return to work or volunteer.

• Family members faced with daily uncertainty and caring may well also be relieved of stress and anxiety and also return to work.

These bring social and emotional benefits, they also bring financial benefits, such as saved healthcare costs for treatment of the patient, for physical and mental health, the parents mental health, the increase in productivity of the parents

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Demonstrating value for communities, not companies

Impact of decent homes upgrade

Impact of vulnerable tenants team

Impact of supporting people team

Impact on you

Environment, tenants;- health benefits, cost, pride

Education, Social Services, local GPs, police, families, your communities

Health benefits, Social Services, families, other agencies

Currently Pressure on funding

We all know the benefits ripple out, now we are: • quantifying them• telling our story in our audience’s language

Benefits of SROIMeasuring value helps us to understand which activities are particularly

effective

And as a result understand and describe;

• The change achieved (outcomes) for recipients, families, communities and others – such as donors and staff

• The value that those changes bring – emotionally and financially

• Giving the ability to focus resources where they are most needed.

• Articulate that value to others – internally and externally and use it as a differentiator and a tool for influence;

1. Influence funders, including local authorities, and other agencies

2. Influence government policy

3. Internal Staff

4. Partners, Stakeholders7

Impact Measurementas an influencing tool...

Internal view

• Prioritisation of scarce resource

• How can we maximise our impact?

• Better understanding of the impact of services

• Identify new opportunities

External view

• Highlight your value to others

• Demonstrating impact as an aid to fundraising activities

• Publicising the wider benefits to increase donations

• Use for promotional material and other marketing

Understanding your impact

Social Impact MeasurementHow does it work ?

Impact = Σ Outcomes – (deadweight + alternative attribution + displacement)

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Impact made by your organisation

Presentingyour answer

We talk about… You understand… We explain…

Outcomes The difference you make, the change achieved.

• Who benefits• How they benefit

Theory of Change How did that change happen, what part did you play?

• The chain of events• Who else contributed• What would have happened

anyway

Social Return What social return your work achieved.

• The Social Value you created or saved

Public Services (Social Value) Act 2012

(1)If a relevant authority proposes to procure … the provision of services, or … of goods or the carrying out of works, ….…..

The authority must consider— .

(a)how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and .

(b)how, in conducting the process of procurement, it might act with a view to securing that improvement

Not applicable to Welsh based bodies but applies to non Welsh based bodies that operate in Wales

Going further than financial accounts

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  Financial Accounts  Social Impact They measure  Economic transactions: the 

cash flows, assets and liabilities 

Social transactions: the difference we make, to whom, and how we make it 

Why we want to know Manage our finances Manage the effectiveness of our work 

How we measure it  Cash flow forecasts; I&E accounts, balance sheets; financial or proxy KPIs 

SROI Social Accounting Total cost accounting 

So we can.......  Manage resources Influence funders and partners Assess our ability to fund our work Explain our finances  

Improve effective delivery Focus resources where most needed Influence funders and partners Explain our work 

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“Full” Social Impact

“Limited view” social impact

Local area economic (LM3-

type)

Wider cashable savings

Narrow cashable savings

Categorising Financial Measures of Social Impact

THINK• Timescale and

measure• Viewpoint• Purview

© Clifford 2013

How do you measure it

Action research – identification, mapping and evaluating, or

story telling!

• Session One Establish the story of change

• Session Two Fine-tune the story of change

• Session Three Develop the story into models

• Session Four Test the models

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Establish the story of change

In reflecting on the change created the group will also consider whether all the outcomes are in fact due to your work, and to what extent all of the outcomes are positive.

In SROI we consider this in three ways:

• Would the outcome have happened anyway without our work? We call this deadweight

• Did the outcome arise because of the activities of others instead? We call this alternative attribution

• Do the activities sometime result in disadvantage or a reduction in a positive outcome, or perhaps an increase social cost? We call this displacement

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An example of an outcome map

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Developing the models

Building on what we’ve learnt from the first sessions, we take an understanding of how change happens and put these together to build models.

For example;

1. Reduced Anti Social Behaviour - We might establish that 25% of tenants suffer from poor mental health in areas of high ASB, after a successful intervention we can greatly reduce this.

2. Housing new tenants – we would look at the impact on a family of gaining a permanent home replacing overcrowded and temporary accommodation.

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Modelling the lives changed…………

Does this have any other applications?

• Yes – Payment by Social Impact Results

• Yes - Bond issues based on social impact

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Payment by Results New issues to address

Provision of

services

Receipt of Funds

Bridging the Funding Gap

• Impacts may be long term in nature• Creates issues for cash flow management• Added difficulties for smaller/less mature organisations

Is this a new idea?

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First UK example of payment by results: Victorian school system, 1863

With thanks to:

A “relatively” simple SIB structure

From the “Social Investment Symposium Report 2013”

Investors1st Close £2M

IAAM Fund (LLP)

It’s All About Me SIB Structure

£ £

Network of VAAs

The Voluntary Adoption Agencies 

Service Providers

LAsThe Local Authorities

SLAMPsychiatric Assessment 

Service Provider

IAAM Service Co (Ltd)

IAAM Sharing Ltd

(Profit Co.)

CVAAThe Consortium for Voluntary Adoption 

Agencies

Profit Share

Admin Fee & SLAM 

Adoption Register

SOF£1M

Investors1st Close £2M

IAAM Fund (LLP)

£ £

Outcome based 

payments

Outcome based 

payments

Return of funds + min 4% profit 

share

Where are today’s SIBs?

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Peterborough: recidivism

Essex: children in care

GLA: homelessness

Greater Merseyside: NEETs

Nottingham: NEETs

West Midlands: NEETs

Perthshire & Kinross: NEETs

London: NEETs (4 projects)Wales: NEETs

Manchester: Children in care

North West England: NEETs

Voluntary Sector Nationwide: “It’s All About Me”

With thanks to:

© 2012 Baker Tilly UK Group LLP, all rights reserved

Baker Tilly Tax and Advisory Services LLP, Baker Tilly UK Audit LLP, Baker Tilly Corporate Finance LLP, Baker Tilly Restructuring and Recovery LLP and Baker Tilly Tax and Accounting Limited are not authorised under the Financial Services and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment services because we are members of the Institute of Chartered Accountants in England and Wales. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide.

Baker Tilly & Co Limited is authorised and regulated by the Financial Services Authority to conduct a range of investment business activities.

Any (more) questions?Keith.ward@bakertilly.co.uk

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