Applying Social Return on Investment (SROI) to the built environment

Figures & data

Table 1. Summary of social impact assessment methods.

Method/tool	Developer	Description	Benefits	Limitations
Social enterprise balanced scorecard (BSC)	Robert Kaplan and David Norton’s BSC model (1992) modified by Social Enterprise London for the charitable sector	Internal management tool. Process focused. Visual representation of strategic objectives for multiple bottom lines, including social impact. Identification, achievement and measurement of two to four key goals (Clark, Rosenzweig, Long, & Olsen, 2004; Sanfilippo, Cooper, Murray, & Neitzert, 2009)	Useful for strategy development. Key goals communicated in a focused way. Encourages their deeper measurement via another social impact assessment method	Limited in scope to the essentials, not in depth. No quantitative results. No external validation or certification
The third sector performance dashboard	Social Firms UK – developed from an internal performance management tool	CD-ROM tool based on the BSC (see above). Software to monitor performance against typical objectives in the sector using template measures or build your own. Can be used for projects, programmes or a whole organization (Sanfilippo et al., 2009)	Simple, practical, user-friendly – provides templates and samples for busy organizations to use/adapt as required. Clear self-assessment of performance against set objectives. Can generate reports for external audiences	A dashboard of quantitative indicators – no exploration of long-term outcomes or impacts. No real external use. No external validation or certification
Ongoing assessment of social impacts (OASIS)	Roberts Enterprise Development Fund (REDF), 1999	Social management information system to assess organizational outcomes. Integrates tracking practices with mission goals (Maas & Liket, 2011)	Outcomes measurement based on credible research methods	Tracking process limited to outcomes of two years (Clark et al., 2004)
Social return assessment (SRA)	Pacific Community Ventures, 2000	Social investment portfolio system to assess the social return of each investor. Distinct from financial performance assessment. Retrospective. Process focused (Maas & Liket, 2011)	Useful to target and improve services. Social returns in financial form	No impact measurement
Social accounting and auditing (SAA)	Social Audit Network; also Jed Emerson’s blended value accounting (Emerson, 2003)	Organizational framework for monitoring, evaluation and accountability. Evidence base for societal impact of economic activities for both internal and external stakeholders. Also used for internal decision-making. Does not require monetization of outcomes (Gibbon & Dey, 2011; Sanfilippo et al., 2009)	Flexible and holistic method for evaluating organizational performance and impact. Stakeholder engagement focus. Useful for strategic planning, CSR (corporate social responsibility) activities. External validation of social accounts	Time intensive, not yet recognized by funders. Flexibility of process reduces comparability of results. No benchmarking
Social impact measurement for local economies (SIMPLE)	Social Enterprise London and University of Brighton	Organizational framework to understand, measure and communicate impact. Internal strategic review combined with outcomes-based assessment. Five stages: scope, map, track, tell and embed (McLoughlin et al., 2009; Sanfilippo et al., 2009)	Quantifiable data collection. Strategic perspective to analysis. Holistic use across various levels of an organization	Time intensive at the beginning. No external validation or certification
Benefit–cost ratio	Robin Hood Foundation	Framework for making philanthropic investment decisions via predictive cost–benefit analysis. Underpinned by the principle of ‘relentless monetization’: outcomes are assigned monetary value relentlessly, even when they are hard to measure or evidence is slim. Can direct spending to programmes that do the most good per dollar of costs (Weinstein & Bradburd, 2013)	Offers a common yardstick to measure the success of philanthropic outcomes. Flexible seven-step framework (Clark et al., 2004; Weinstein & Bradburd, 2013)	Time intensive and costly. Requires a wide skill set. Broad-brush approach, no replicable method
Social Return on Investment (SROI)	Roberts Enterprise Development Fund (REDF) in the mid-1990s in the US; brought to the UK in 2003 by the New Economics Foundation (nef); The SROI Network was established in UK in 2008 and renamed Social Value UK in 2014	Outcomes-based measurement tool, related to cost–benefit analysis. Project/activity focus. Mixed methods: qualitative stakeholder engagement, quantitative outcomes measurement, valuation via financial proxies, to produce the SROI ratio of costs to social returns. Also produces a narrative of the organization’s value creation (Clark et al., 2004; Sanfilippo et al., 2009)	Produces a transferable, financial metric in ‘ROI’ (return on investment) language understood by investors and commissioners. Credible results based on actual data and proxy research. nef’s version promotes consistency in approach for robust results. Can be applied as predictive or evaluative. External validation through Social Value UK and others. One of the most developed social value tools	Time intensive and costly. Requires a range of skills, from stakeholder engagement to spreadsheet analysis. The ratio is often used out of context of the accompanying narrative report
Social e-valuator	d.o.b. Foundation, Noaber Foundation and Scholten Franssen (Dutch consultancy)	Web-based software acting as a guide to the SROI method. Provides information, expert knowledge and on-line training (Anyetei, 2012)	Provides a comprehensive guide to the complex SROI process which requires a range of skills (as above)	Software is purchased under licence
Basic efficiency resource (BER) analysis	Dr Brian Cugelman and Eva Otero for the Oxfam GB global climate change campaign	Cost-effectiveness-based framework for the evaluation of complex programmes by enabling a comparison between operational ‘units’, e.g., teams, departments, functions. Shares underlying the theoretical foundation with SROI, but no financial valuation. Over- or underperformance visualized in two-dimensional matrix of quadrants (Cugelman & Otero, 2010; Eurodiacona, 2012)	Simple framework for the evaluation of complex activities. Provides results that are easy to understand. Initiates a deeper discussion to understand why units fall into specific quadrants. Can be used to compare internal and external perspectives	Time intensive and costly (less so than SROI). Lack of quantitative results. Not to be used as the only evaluation approach. No monetization. No external validation or certification
Best available charitable option (BACO) ratio	Acumen Fund	Prospective project-focused tool to identify how best to allocate philanthropic resources. Compares cost per output of intended project with similar project. No impact measurement or valuation (Lee & London, 2008; Weinstein & Bradburd, 2013)	Cost per output focus means output units common to both projects are used, e.g., number of end users. Avoids the need for aggregating across various types of outcomes which is complex	Cannot direct funding decisions across different types of projects. Impacts are not valued
Cost per impact	Center for High Impact Philanthropy	Metric to estimate the cost of achieving a single, primary outcome. Like an inverse cost–benefit analysis. Retrospective. Empirical definition of success and the costs associated with achieving that success (Maas & Liket, 2011; Weinstein & Bradburd, 2013)	Useful starting point from which to evaluate an opportunity	Cannot aggregate across different categories of outcomes
Expected return	William and Flora Hewlett Foundation	Measure for the expected impact of a grant. Benefit monetized and multiplied by the probability of success. A prospective cost–benefit analysis (Maas & Liket, 2011; Weinstein & Bradburd, 2013)	Useful for application to large-scale projects	No stakeholder engagement focus. Simplified divide between success and failure

Table 2. Key terms from the social impact assessment sector.

Inputs	The resources that go into the intervention
Outputs	The product of the intervention, i.e. the number of end users reached
Outcomes	The difference that the intervention makes, i.e. the changes that end users experience
Counterfactual evidence	The outputs and outcomes that would have happened regardless of the intervention
Impact	The overall effect of the outcomes minus counterfactual evidence

Table 3. Application of the six stages of the Social Return on Investment (SROI) to the case buildings.

Stages of SROI	Application to case buildings
1. Establishing scope and identifying stakeholders	Establish scope
	Identify case buildings Establish what is being studied – internal impacts to building users, not external impacts to local economy/community, etc. Semi-structured interviews with project teams (n = 17)
	Identify stakeholders
	Semi-structured interviews with centre managers (n = 3) – identify building user groups
2. Mapping outcomes	Focus groups with each building user group in each case building (n = 12)
3. Evidencing outcomes and giving them a value	Evidence outcomes
	User survey for each building user group in each case building (n = 12) Give them a value Desk-based research to identify and apply financial proxies to outcomes
4. Establishing impact	Desk-based analysis of user survey data to calculate deadweight and attribution measures
5. Calculating the SROI	Inputting the building costs
	Calculating the ‘added cost’ using an NHS benchmark
	Inputting the social returns
	Sum of the total impact of outcomes
	Calculating the SROI ratio
	Social returns divided by ‘added cost’ of building
	Projecting into the future
	Application of discounting rate across useful time points, e.g., 10 years before a refit is required, 60 years typically the lifetime of design
	Payback period
	Calculating the number of months before the social returns equal the original investment
6. Reporting, using and embedding	Further research to assess whether the SROI has effectively captured the social value of the case buildings Report findings to case organizations Further research to understand whether the SROI is useful to designers, commissioners and other decision-makers Further research to assess whether it could be embedded in the design or commissioning process

Table 4. Summary of cancer support centre case buildings.

Case building	Organization	Build type	Size (m^2)	Built environment	Clinical/non-clinical	Rooms provided	Services offered
1	Charitable	New build	360	Domestic scale, standalone building within an NHS hospital campus	Non-clinical design (homely)	Kitchen, library, private rooms, activity room, office	Psychosocial support, benefits advice, nutritional advice, low-impact exercise sessions, arts and crafts sessions
2	Charitable	Fit out	300	Ground-floor unit in a mixed-use commercial development in an inner-city context	Non-clinical design (spa-like)	Reception, library, therapy rooms, activity room, several offices	Psychosocial support, complementary therapies, nutritional advice, low impact exercise sessions
3	NHS	Structural retrofit	106	Non-clinical space within an NHS hospital building (between a ward and an external, fully glazed access corridor overlooking a walled garden)	Clinical feel (NHS environment)	Library with a reception desk, private consultation booths, several offices	Psychosocial support, benefits advice, signposting service to relevant information

Source: Watson et al. (2016a, p. 294).

Table 5. Number of building users in each case building.

	Case building 1	Case building 2	Case building 3
Visits	10,517	4913	11,860
Centre staff	6	6	4
Session leaders/therapists	19	12	4
Volunteers	17	15	3

Table 6. Main sections in the user surveys.

Introductory paragraph: survey purpose and research team details Background information: user group status, age, time spent in building, time spent in specific spaces Agreement to reported outcomes Cross reference reported outcomes and reported design features Rate the impact of reported design features Information required for Stage 4 (see next Methods section) Rate percentage change to alternative outcomes identified during the transcript analysis

Table 7. Financial proxies identified for SROI analysis of case buildings.

Financial proxy	Value	Source
Cost of suffering from depression or anxiety per individual p.a.	–£44,237	Valuing Mental Health: How a Subjective Wellbeing Approach Can Show Just How Much It Matters (Fujiwara & Dolan, 2014)
Value of being relieved from depression or anxiety per individual p.a.	£36,766	Measuring the Social Impact of Community Investment: A Guide to Using the Wellbeing Valuation Approach (Trotter et al., 2014)
Value of regular attendance at a local organization per individual p.a.	£1773	As above
Value of being able to obtain advice locally per individual p.a.	£2457	As above
Value of being a member of a social group per individual p.a.	£1850	As above
Value of having a hobby per individual p.a.	£1515	As above
Unit cost of a general practitioner visit in the UK	£49	Unit Costs of Health & Social Care 2013 (Curtis, 2013)
Average salary for centre staff in each case building	–	Primary data
Average wage per hour for session leaders/therapists in case buildings	£36	Primary data
UK minimum wage per hour for over 21s (2013/14)	£6.31	https://www.gov.uk/national-minimum-wage-rates
Cost per hire for employees in the not-for-profit sector (not senior managers or directors)	£1500	Resourcing and Talent Planning 2012 (Sinclair, 2012)

Note: p.a. = per annum.

Table 8. Inputting the ‘added cost’ of the case buildings.

Case building	Build type	‘Added cost’ calculations
1	New build	Professional fees, contract sum and furniture, fittings and equipment (FF&E) cost for new build; minus NHS benchmark fees, contract sum and FF&E cost for new build
2	Fit-out	Professional fees, contract sum and FF&E cost for fit-out; plus estimated fees, contract sum and FF&E cost for core-and-shell unit; minus NHS benchmark fees, contract sum and FF&E cost for new build
3	Structural retrofit	Professional fees, contract sum and FF&E cost for retrofit; minus estimated NHS benchmark fees and contract sum for retrofit; minus NHS benchmark FF&E cost for new build

Source: Watson et al. (2016a, p. 296).

Table 9. Summary of SROI results for the case buildings

Case building	Floor plan (m^2)	Total impact		‘Added cost’ of case building								SROI ratio
				Total		Professional fees		Contract sum		FF&E cost		1 year	10 years	60 years
			/m^2		/m^2		/m^2		/m^2		/m^2
1	360	£134,991	£375	£1,726,710	£4796	£289,840	£805	£1,265,600	£3516	£171,270	£476	£1:£0.08	£1:£0.65	£1:£2.07
2	300	£68,764	£229	£918,925	£3063	£88,200	£294	£688,000	£2293	£142,725	£476	£1:£0.07	£1:£0.62	£1:£1.98
3	106	£23,445	£221	£1,037,937	£9792	£109,296	£1031	£928,641	£8761	£0	£0	£1:£0.02	£1:£0.17	£1:£0.54

Source: Adapted from Watson et al. (2016a, p. 298).

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