Many social service, health and community service providers are having conversations internally about whether they should undertake a Social Return on Investment (SROI) review to assess the impact and value of their services and programmes.
An SROI tells the story of how change is being created by measuring social, environmental and economic outcomes, and uses monetary values to represent them. For example, The Graeme Dingle Foundation, which offers a number of youth development programmes, undertook a SROI which indicated a $10.50 return for every dollar invested (reference)¹.
SROIs appear to be a favoured approach of this Government to measure the impact of services delivered to clients, so social service providers hope that if they undertake a SROI it will put them ahead of the pack in procuring government funding. For example, the recently announced Mental Health and Addiction Community Sector Innovation fund included, as part of its eligibility requirements, that applicants show that their programme returns a positive
SROI.
One of the dilemmas for social service providers is the hefty cost of contracting a company to undertake a SROI, money that could otherwise be used to deliver much needed social services. Concern has also been expressed about the validity of SROIs, including their methodology which has a degree of subjectivity in determining how the value of services are measured. For more information about the advantages and limitations of SROI’s go to https://whatworks.org.nz/social-return-on-investment.
I think there is a general consensus among social service providers that it is very important to measure the impact their services are having on clients to ensure they are having a positive impact on a person’s life. However there are many, many ways to effectively measure impact that doesn’t come with such a hefty price tag.
It also raises issues about equity among social service providers. The larger agencies are likely to be better placed to shell out money for a SROI, and smaller agencies are a lot less likely to be able to allocate that amount of funding. This could disadvantage smaller agencies from procuring Government funding, which potentially risks the long-term sustainability of smaller providers.
So what is a social service provider to do? In the broader interests of the social sector and the clients they serve, larger agencies could unite and support smaller agencies by not undertaking a SROI. However if it is perceived that this means risking their chances of Government funding it would be a hard call to make. The funding environment has unfortunately always been competitive, but if accessing funding becomes further divided by those who can undertake a SROI and those who cannot, it will deepen inequities between larger and smaller agencies.
There is also a risk that if smaller agencies can’t survive then choice of services will reduce for people seeking social services, and the large agencies could become like pseudo Government departments with all the associated bureaucracy of a very large organisation.
Smaller agencies may need to consider opportunities to buddy up with another agency. There are many different models or ways of what this could look like, such as co-location, integrated service delivery, formal partnerships, sharing administrative functions, a merger and so on.
SociaLink will be holding a workshop in November 2024 to provide an overview of these options, including case studies, and providing a forum for organisations to consider and discuss such options.
Umbrella or peak bodies in the social and community sector are also talking to the Social Investment Agency and the Minister for the Community and Voluntary Sector Louise Upston about the potential impact that requiring SROIs will have on the sector.