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Using Social Return on Investment (SROI) to purchase public benefit: the case of waste management

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Using Social Return on Investment (SROI) to purchase public benefit: the case of waste management Eva Neitzert Aniol Esteban nef (the new economics foundation) – PowerPoint PPT presentation

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Title: Using Social Return on Investment (SROI) to purchase public benefit: the case of waste management


1
Using Social Return on Investment (SROI) to
purchase public benefit the case of waste
management
  • Eva Neitzert
  • Aniol Esteban
  • nef (the new economics foundation)

2
NEF
  • Independent think-and-do tank concerned with
    promoting innovative solutions to promote
    economic well-being
  • Environmental sustainability
  • Social justice
  • Well-being
  • Long-standing relationship to third sector
  • e.g. Social Enterprise Partnership, Performance
    Hub, Social Enterprise Ambassadors Evaluation
    etc.
  • Measurement matters
  • Tool development - Social Return on Investment
    (SROI) and LM3

3
Why SROI?
  • Valuing mission-driven organisations
  • Captures social value by translating outcomes
    into financial values
  • SROI Ratio value of benefits value of
    investmentseg. Ratio of 21 means that for
    every 1 invested in organisation 2 of social
    value are generated
  • Social includes the environmental and economic
    triple bottom line

4
More than a ratio
  • Participative framework for finding out about how
    an organisation creates value
  • 4-stage process
  • Stage 1 Boundary setting, stakeholder engagement
    and impact mapping
  • Stage 2 Data collection
  • Stage 3 Modelling and calculation
  • Stage 4 Reporting and embedding

5
Doing an SROI
Stakeholder Input Activity Output Outcome Outcome indicator/proxy
Participants (32) Skills Time Trained in computer recycling IT skill set No. of recycled computers Increased self-confidence Improved mental health Sustainable employment Improved life stability gaining employment and average wage earned (13,500) ATTRIBUTION DEADWEIGHT
Local government Not applicable Not applicable No. of computers recycled and diverted from landfill Reduced landfill expenditure Improved local environment, of tonnes diverted/ cost per tonne (39) DEADWEIGHT
National Health Service Not applicable Not applicable Prolonged support for participants, improved skills for participants Reduction in care costs Improved mental health of participants Reduction in use of mental health services unit cost of in-patient mental health care (20,500)
6
Case-study
  • Social enterprise that provides bulky waste
    collection in Lancashire
  • Context ongoing research on benefits of TSOs in
    waste management activities
  • Contract with council to collect domestic bulky
    waste
  • Organisation reuses / recycles materials, trains
    disadvantaged people and sources goods to poor
    families.

7
Stage 1
  • Boundary setting local (area in which contract
    is developed) / beyond local
  • Stakeholder engagement limited // only
    interviews with organisation and LAs
  • Impact mapping based on interviews

8
Impact map
Stakeholders Needs Activities Outputs Outcomes
Local Authorities Divert waste from landfill Reuse and recycling bulky waste Waste diverted from landfill Savings to LAs () Reduced environmental impact Contribution to council targets
Households in need Low cost furniture 2nd hand furniture showroom Furnished homes cost savings Reduced debt Increased well-being Increased community cohesion
Volunteers Training / Personal development meaningful use of time Training and supervision Learning new skills Working as a part of a team Improved skills and employability Increased self-esteem and confidence Improved well-being Employment Reintergration with family and community
9
Stage 2 data collected
  • 150 tones diverted from landfill
  • 90 volunteers, 67 obtained qualifications, and 11
    got a job after one year
  • 5,436 people assisted in 2007 - 260k estimated
    savings compared to the cost of buying second
    hand good
  • 250k Money spent locally

10
Stage 3 calculation
  • Avoided landfill tax 3,600
  • Carbon savings 1,413
  • Reduced env. impacts landfill 750
  • Savings to families in need 138,705
  • Improved human capital 132,000
  • Benefits to individuals 24,750

11
Stage 3 calculation
  • Benefits to Local Authorities 69,600
  • Benefits to Local citizens and communities
    164,205
  • Wider benefits (national and global
    citizens) 67,413
  • Cost of scheme is covered with grants and with
    revenue from sales of reused material.
  • The total public investment in the Bulky Waste
    collection programme amounts to 185,000 (165k
    contract / 20k grants)

12
Stage 4
  • Each public invested scheme has generated
  • 0.37 of added value to LAs
  • 0.88 of added value to Local citizens and
    communities
  • 0.36 of added value to national and global
    citizens
  • Total 1.61 per public invested
  • SROI 1.61 1

13
Stage 4
  • Previously council would pay 110,000 to take all
    bulky waste to landfill (no additional benefits
    created).
  • Value per additional investment of 56,710
  • 1.23 to LAs
  • 2.9 to local citizens and communities
  • 1.19 to national and global citizens
  • Total 5.32 per additional public invested
  • SROI 5.32 1

14
is only part of the story
  • (Non-monetised)
  • Increased environmental awareness. Reduced
    environmental impact at source, positive impact
    on local economy from 33 jobs supported by scheme
    and about 250,000 income spent locally. stronger
    community cohesion through integration of
    socially disadvantaged people with more than 600
    people taking part in events, increased
    well-being to families, improved well-being to
    individuals volunteering, innovation, replication
    potential

15
Seeing half the picture
Social enterprises, third sector orgs
16
Seeing the full picture
Social enterprises, third sector orgs
Public service contracts
17
The problem
  • Efficiency agenda
  • Focus on cash-able savings
  • Service specifications focus on
  • Activities
  • Outcomes
  • Unit cost becomes driving force

18
Sustainable Commissioning outcomes framework
1. Activity 2. Output 3. Service level outcomes 4. Camden Community outcomes social economic environment 5. Value Quantitative Qualitative Monetizeable Where value accrues To Service Camden wide central government
19
Day Care Services pilot
Procurement phase Innovation
Service Specification - outcome focussed - Added social, economic and environmental outcomes accompanying service outcomes Co-production principles
Pre-Qualification Questionnaire Made consortium/partnership friendly Inserted Question on wider outcomes Adjusted weighting accordingly
Tender Schedules Outcome framework part of provider method statement in Schedule 1 (double weighted) Further schedules outcome focussed - Pricing schedule need to level the playing field
20
Outcomes of the tenderprocess
  • Consortium of 3 medium-sized locally based 3rd
    sector providers
  • Not cheapest
  • Commitments to
  • involve the wider community through use of
    volunteers
  • Co-production - peer led support and education
    initiatives and time-banking
  • Bulk buying of catering supplies from local
    sources
  • Recycling, walking and cycling initiatives with
    service users and staff
  • Key point This result was achieved not just
    because better skills of third sector providers,
    but because they could use them

21
So
22
Further information
  • eva.neitzert_at_neweconomics.org
  • www.neweconomics.org.uk
  • Measuring Value A guide to Social Return on
    Investment (2008)
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