Upload
iicredit
View
54
Download
2
Embed Size (px)
DESCRIPTION
Introducing a framework for Community Development Financial Institutions to discover and calculate Social Return on Investment (SROI). Connect program outcomes to societal contributions and savings.
Citation preview
Outcomes, Impact & How to Track Them
By Lawson F. Knight,
iiCredit Wind River Development Fund
Goals
• Introductions • Background of Social Return on
Investment (SROI) • Linking SROI and Program
Evaluation • Model CDFI SROI • Developing SROI for your CDFI • Getting to a defensible result • Your next steps
About Us
Wind River Development Fund is a private, nonprofit community development corpora4on and federally cer4fied Community Development Financial Ins4tu4on that seeks to s4mulate economic development on and near the Wind River Indian Reserva4on.
iiCredit is a cloud-‐based CDFI opera4ng system built on the force.com platorm. Built as an earned-‐income strategy of Wind River Development Fund (WRDF). WRDF is iiCredit's first user. The applica4on was built with the prac4cal goal of moving the en4re Enterprise Stack, from data-‐storage to e-‐mail, to the cloud.
CDFI Service Delivery Model
Par4cipant Recruitment & Intake
Life & Financial Skills Development
• One-‐on-‐One Assistance • Workshops & Training
Capital Access
• Lending Capital • Asset Building (Matching Funds)
Stability, Reten4on & Community and personal
growth
• Less Poverty • More Prosperity
ROI
• Return on Investment. What does that mean?
• How much do I get back for what I spent?
• For Instance:
– My CDFI lends $10,000 for 60 months to a local business at 8% • Financial benefit? • Investment?
– For every $100 invested in this business, my CDFI receives nearly a $22 return.
Financial Benefit Cost of Investment
ROI =
• Why ROI is insufficient for CDFIs • What are CDFI topline outcomes?
Social Return on Investment
Topline Outcome
Client Changes Societal Changes
Improved Financial Capabili4es
Capital
More income taxes More sales tax
Self-‐ sufficiency
Fewer people reliant on public benefits
Capacity Less likely to return to old habits
Fewer people: Usurious financial instruments
CONTRIBUTIONS
SAVINGS
SROI
• Translate ROI to SROI:
• Clearly state your assumptions • Use and document research to cite your analysis
Financial Benefit Cost of Investment
SROI = SOCIAL
Societal Contributions + Savings Cost of Investment
=
A primer on SROI
• SROI was first developed in 1997 by Roberts Enterprise Development Fund (REDF) to analyze the impact of seven nonprofit organizations in San Francisco
• These nonprofit organizations were running 23 social purpose enterprises—a proving ground for business/financial concept like ROI to be adapted as a program tool
• SROI grew from there: – Methodology paper released in 2001 – Framework document launched in 2005 – Guide to SROI analysis published in 2006 – DIY Guide released in 2007 – SROI Network formed in 2008 – Since then, affiliated SROI Networks in Japan, Sweden,
Australia, the Netherlands, and the UK. SROI guides published in French, Korean, and Chinese.
What is program evaluation?
• Program evaluation is gathering information about (some aspect of) a program in order to make necessary decisions about the program.
• There’s lots of kinds of evaluation: – Needs Assessment – Process evaluation
• Pareto Principle
Why is it helpful?
• Helps you understand the impact of your work
• Validates what we’re doing & how we’re doing
• Provides evidence for public, promotion, funders and duplication
CDFI Sample SROI
What values does a CDFI create for Society? Social Impact:
Annualized Contributions to Society $
Income Taxes Paid, Social Security, Sales Tax Dollars Spent
Annualized Savings to Society + $
Total One-Year Social Impact $ Determining the Social Return on Investment:
Present Value of Social Investments (Over Five Years)
$
CDFI One-year Program Cost / $
Social Return on Investment
%
Sample CDFI Title Slide
Societal Contributions
Annualized Contributions to Society
Topline Outcome: # of quality, permanent employment jobs created
Total Annualized Income
Job #1 Wages and Benefits + Job #2 Wages and Benefits + Job #3 Wages and Benefits + . . . All jobs created ________________________ TOTAL INCOME
2014 Income Tax Rates Income Tax Contributions
Federal 15.0% + Social Security 6.2%
21.2%
TOTAL INCOME x 21.2%
Societal Contribu4on
Sample CDFI Title Slide
Societal Savings
Annualized Savings to Society
Topline Outcome: XX working in quality, permanent employment in 2014 • Y were receiving Food Stamps at program entry
Total Annualized Food Stamps Payouts
$252 avg per month x 12 months per year
x Y recipients $ Food Stamps savings
• Temporary Assistance to Needy Families (TANF) and Unemployment savings are calculated in the same way – Based on real data collected during program intake – Knowledge that payouts stop when individual is on the job
Understanding Outcome Estimation (EITC participation in WY)
=Income due to intervention"
Your topline outcome group"
Research expected rate of participation (7 of 10, 70%)"
Calculate your org’s rate of participation"(9 of 10, 90%)"
Take the difference (2), and research/calculate cost of participation per person"
x Proceeds from " participation"
The Final Calculation
• 1 = One Year Program Cost • 2 = Contributions to Society + Savings to Society
– Take one-year results and project out for as many years your enterprise is comfortable.
– Three to five years is typical due to uncertainty beyond. Five years is typical for startup financial projections.
– For each year the projection extends, discount the social benefit to account for inflation and risk. • 30-year bond rate or CPI • Risk factor is an internal, defensible election like 5% (or more)
SROI = Social Financial Benefit2
Investment1
Where do you go from here
1. Do your quick wins first.
2. Be as much of a “Data Geek” as you like. Go as far as your interest, resources and ability to sustain assessment over time.
3. This can be heady stuff. Make it thoughtful, defensible and approachable. Don’t be arrogant.
4. Be informed and humble.
5. Move the conversation from grants to investment.
Grow in your capacity Level 1 Level 2 Level 3 Level 4
Enterprise Social Outcome Measurement
Neither inputs/ac4vi4es or social impact of enterprise are measured
Enterprise's social inputs and ac4vi4es measured (e.g. # of employees; # of trainings held); data collected ad hoc from various sources
In addi4on to inputs and ac4vi4es, social outputs measured (e.g. income or housing status of employees); some data collec4on systems exist but not necessarily coordinated; data some4mes used to refine enterprise service delivery
Comprehensive, coordinated data collec4on and tracking system used to track both outputs and outcomes (e.g. % decrease in substance abuse) over 4me; data trends analyzed and used to refine enterprise service delivery
From REDF's capacity assessment tool
Resources • Lingane, A. & Olsen, S. (2003). Guidelines for social return
on investment. Working Paper Series, Center for Responsible Business, UC Berkeley. Retrieved from http://escholarship.org/uc/item/6xp540hs
• McNamara, C. A Basic Guide to Program Evaluation. Authenticity Consulting, LLC. Retrieved from http://www.tgci.com/sites/default/files/pdf/A%20Basic%20Guide%20to%20Program%20Evaluation_0.pdf
• SROI Network. SROI: A History. Retrieved from http://www.thesroinetwork.org/what-is-sroi/a-history-of-sroi
Lawson F. Knight iiCredit Development Wind River Development Fund [email protected] (307) 828-1618
Arum Kone Chief Technology Officer & Data Scientist Wind River Development Fund [email protected]
Brett White Executive Director Wind River Development Fund [email protected]