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Social Return on Investment: a new way to measure FLAG results

The Cornwall and Isles of Scilly FLAG commissioned an analysis of the Social Return on Investment in order to measure the impact of its animation activities. It found that each euro invested by the FLAG brought a social return of €5.45 in benefits to the local community.

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Context, needs, opportunity

The Cornwall and Isles of Scilly FLAG operated from September 2012 until December 2015 and covered an area with a population of 532 300 inhabitants, including 1000 people directly employed in fishing. The FLAG focused on developing the local supply chain, providing shared infrastructure facilities for fishing communities, and supporting training, capacity building and economic development in the coastal area. An interesting feature of the FLAG was to fund a “Fisheries Animateur”, whose main role was to help fishermen bring forward projects relevant to all Axes of the EFF. The Animateur was employed by the Cornwall Rural Community Charity in partnership with Cornwall Development Company who were the FLAG’s accountable body.

At the end of the programming period, the FLAG wanted to assess the wider contribution of the animateur whose main task was to promote the FLAG's Strategy among potential beneficiaries, going beyond quantitative data such as the number of jobs created. The decision was taken to use the Social Return on Investment methodology.

Objectives

To identify and measure the social benefits the FLAG activity brought to the community and to attribute to these benefits an appropriate monetary value.

Methodology

Social Return on Investment (SROI) is a method which helps to allocate financial values to non-financial benefits (benefits which cannot be measured by conventional financial accounts) of a project or activity1.

To allocate a financial value to the activities of the Cornwall FLAG, a special methodology was developed by an economic development company called Rose Regeneration, in partnership with the University of Gloucestershire. The social benefits of the FLAG activity were assessed on the basis of the following eight features of a sustainable community2:

  • an active, inclusive and safe community,
  • a well-run community,
  • environmentally sensitive,
  • well designed and built,
  • well connected,
  • fair to everyone,
  • thriving economically,
  • well-served.

These features don’t usually have a market value, so the SROI method requires finding appropriate “proxies” or indirect indicators3 for this purpose. Through interviews with project beneficiaries and a series of complex calculations the evaluators were able to assess how the work of the Animateur contributed to the eight features of a sustainable community and propose a financial value for it. The final outcome (€19 700 000) was then compared to the total FLAG budget (€3 600 000), giving a Social Return on Investment of 5.454.

  • Main achievements: The SROI methodology has enabled the FLAG to assess and demonstrate the wider impacts of the activities of the Fisheries Animateur, and to attribute a monetary value to the benefits for the fisheries community in a way that is accepted and credible.

  • Transferability: All FLAGs struggle with the issue of going beyond the simple calculation of project costs and measurable outcomes to demonstrate and measure the broader impacts of community and project animation. The SROI methodology is an option for this. It should, however, be noted that the methodology is still under development and requires specific expertise to apply.

  • Lessons: With this methodology, it is important to work with competent and experienced experts in order to arrive at credible results. The method can help to prompt CLLD actors to think about the wider values of local development and may inspire community animators to actively develop projects and linkages.


Resources

  • Skills: an external company with expertise in the SROI methodology must be involved.

  • Staff resources: One staff member from the FLAG to collect data and coordinate with project beneficiaries and the SROI expert consultant.

  • Financial resources: approx. € 6 200 (£ 5 000)

  • Other resources: A FLAG administration staff member to help prepare the final report.


Summary information and contact details

Time frame: 15 days

Case study date: April 2016

Type of organisation promoting the tool/activity/method: FLAG 

Chris Ranford
E-mail: Chris.Ranford (at) cornwallrcc.org.uk

Website: http://www.cornwallrcc.org.uk

FLAG factsheet


Key words: Social Return on Investment, broader impacts of CLLD, community animation.


1 For further references on SROI please refer to http://socialvalueuk.org/what-is-sroi/the-sroi-guide for example
2 As defined in the Bristol Accord (2005) which defines EU-wide principles and characteristics of a sustainable community.
3 Those proxies included, for instance, “willingness to pay for improved water quality”, “annual value attributed to talking to neighbours more frequently” or “the cost of a round trip to the nearest supermarket”.
4 It should be kept in mind that although expressed in monetary terms, SROI should not be compared with the financial return on investment calculated by traditional accounting methods; however, it allows comparison between social benefits of two or more different projects/activities.