Doing ‘good’ – is it really worth it?
March 20, 2017
Most of us do things for the right reasons and with the best intentions. But, how do you know it’s really making a difference? And how do you demonstrate this to others? Is a smile or an anecdote enough to confirm you’re doing the right thing?
We know that businesses can often find it problematic to not only clearly and succinctly describe the impact of their activities on people, communities and society, but also to do it in a way that makes sense to their stakeholders. In short, the outputs need to be more quantifiable and empirical if they are to stack up with the Board, internal stakeholders like the finance team, and external stakeholders too.
But help may be at hand, as St Giles Trust (SGT) recently discovered.
SGT work with ex-offenders to help them break the cycle of reoffending. At the heart of this is their ‘Peer Advisor’ model: providing ex-offenders with formal training to ensure they have the necessary skills to support and counsel people who have just come out of prison. Recognising that these peers are uniquely placed to understand the many challenges facing people as they leave prison, they are also able to help them secure housing, access the services they need and ultimately get a job, so that they can become productive members of society and break the cycle of reoffending.
While the Peer Advisor model makes a lot of sense on paper, and was clearly making a difference from what SGT were seeing on the ground, it was difficult to articulate all this. And so it was becoming harder to justify the extra costs that came with the model – something many in business can probably appreciate too.
So SGT decided to put some ‘hard’ numbers around the impact of the Peer Advisor model. They decided to understand, measure and value its impact using an approach called Social Return on Investment (‘SROI’) analysis.
SROI is a principles-based approach for identifying and measuring the intended (and unintended) consequences of activities – good or bad – by putting a monetary value on these consequences.
But why measure ‘good’ using ‘money’?
Is it possible – or even ‘right’ – to measure good acts in monetary terms? It may sound overly simplistic and to miss the point of what doing the right thing is all about.
But, SROI has its roots in the sorts of evaluation and ‘Cost Benefit Analysis’ techniques that have been used by Government for years in order to establish and measure the effects that policies and programmes have, or have had; and whether or not they have really ‘made a difference’.
The idea is that using welfare economics to put a monetary value on impacts – once they have first been measured – puts them in the same ‘units’ as one another. Measuring them with a consistent ‘yard stick’, so to speak. So many of the techniques that underpin it are well established and respected.
This also puts impacts into a language that can be readily understood by people who may not be steeped in the relevant technical language or data, for example, members of the Board who are ultimately responsible for deciding whether a project goes ahead or is scaled up. So it can help show that activities are making a difference to a much wider audience.
And it also measures the ultimate impact that an activity or project has in a way that can be compared with its financial cost. This is the same idea as the financial ‘Return on Investment’ that business regularly uses to compare financial benefit with financial cost. But now this values the overall benefits and costs to society; via the environment, economy or to individuals directly. Literally, the ‘Social Return on Investment’.
At PwC, we’ve also been using these sort of impact measurement and valuation techniques for some time, helping companies and other organisations better understand the impacts they have on the economy, environment and society. We pull these techniques together into a framework we’ve developed called Total Impact Measurement & Management (TIMM). We used this framework in the work we carried out with SGT.
So what did SGT learn from this exercise?
They found that £8.54 of social value was generated for every £1 spent on the Peer Advisor programme. A reassuring number to convince funders that the initiative delivered value for money.
Crucially, underneath this number, was a wealth of new information about where and how this value was created. You can clearly see the positive and negative impacts in the diagram to the right.
Our analysis showed that this was made up of value to the economy, from bringing more people into the workforce to be productive; value to the Exchequer, from reducing the amount spent on social security benefits and from reducing the number of people reoffending and ending up back in prison; and value to the ex-offenders themselves, who benefitted directly by gaining secure housing, skills and employment.
And, crucial for articulating the benefits unique to the Peer Advisor programme, it showed that around 14% of the overall value generated from the scheme was associated with the Peer Advisors themselves, and wouldn’t exist were it not for this model. This may not seem like much – but the size of this social value alone was more than the financial cost of the programme - so it means that SGT could say that the Peer Advisor model ‘breaks even’ (in social value terms) even before taking into the account the much bigger value associated with the ex-offenders the programme was principally set up to help.
SGT are now using this new information to help show potential funders that what they do through the Peer Advisor model really does ‘add up’ from a societal perspective.
Measuring social impact adds up
So is ‘doing good’, worth it when you’re a business?
Measuring and valuing social impact can allow you to answer this question head-on. It can support current strategy and reinforce existing decisions. But more importantly, it can help businesses to hone, develop and align their strategy in the years ahead so that investment and effort is directed towards those initiatives that have greatest benefit, add greatest value (to both business and society) and yes, perhaps, do the greatest ‘good’.
Read the full case study and find out how we worked with St Giles Trust to help them assess their impact.