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Social Impact Pilot
Social Enterprise Advisers Stuart Griffin and Richard Snelling assisted Bristol City Council in a pilot project to trial two approaches to demonstrating impact with three food-related social enterprises in Bristol. The project was funded by The Commission for Rural Communities and ran throughout 2007.
Social Enterprise Works shared the learning from the work on social return on investment with members through a performance improvement working group run between May and September 2007.
The two approaches used were Local Multiplier 3 (LM3) and Social Return on Investment (SROI)
LM3 studies the flow of money through three rounds of spending: the income of the market, where this is spent, and where this is re-spent in order to measure the local economic impact of a project, activity or organisation.
SROI offers an approach to measure the economic value of the social benefits of an organisation. It does so by translating social objectives into financial measures. It helps organisations to understand, quantify and report on the social value they create. See the C3 website resources section to link to the SROI primer for a comprehensive overview.
The model of SROI has been developed by the New Economics Foundation, building on work initiated in the US. It has been amended for a UK audience and fits in closely with work on social accounting and auditing. The basic premise is that we know that socially driven organisation deliver a return on investment beyond the financial return but it is often difficult to demonstrate and communicate that impact. SROI captures the social environmental and economic value by identifying a monetised value for the social impact.
To give an example, when a previously unemployed person completes a training programme and starts a new job, not only does she increase her personal income but she also creates value to the government by paying taxes and no longer claiming welfare benefits.
The report for this project will be available here soon.
