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Measuring Blended Value: Lessons and Tools for Evaluation from Blended Value and Impact Investing

Measuring Blended Value: Lessons and Tools for Evaluation from Blended Value and Impact Investing. Tessa Hebb, Carleton Centre for Community Innovation, Carleton University, April 28 th 2010. Presentation Overview. Blended Value Metrics and Measurement SROI Techniques

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Measuring Blended Value: Lessons and Tools for Evaluation from Blended Value and Impact Investing

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  1. Measuring Blended Value: Lessons and Tools for Evaluation from Blended Value and Impact Investing Tessa Hebb, Carleton Centre for Community Innovation, Carleton University, April 28th 2010

  2. Presentation Overview • Blended Value • Metrics and Measurement • SROI Techniques • Expanded Value Added Statements • Resources

  3. What is Blended Value • “The Blended Value Proposition states is that all organizations, whether for-profit or not, create value that consists of economic, social and environmental value components—and that investors (whether market-rate, charitable or some mix of the two) simultaneously generate all three forms of value through providing capital to organizations.” Jed Emmerson

  4. Metrics and Measurement Blended value requires measurement of all three forms of value economic, social and environmental. “Measurement should be viewed as a process whereby the greatest value is achieved through organizations building up and learning from data and evidence over time (Measuring the Value of Corporate Philanthropy).”

  5. Social Return on Investment Social Return on Investment (SROI) identifies and describes the social value being created through an organisation’s activities (and the investment needed to deliver them). Uniquely, it seeks to place a financial value on this social value. Using a set of financial accounting principles and standard calculations, SROI analyses produce, as part of a wider report, an “index of social return” (Investing in Impact, UK)

  6. Questions to be asked • What are the results for which we will hold ourselves accountable? • How will we achieve them? • What will they really cost? • How do we build the organization we need to deliver these results?

  7. What to Measure (Measuring the Value of Corporate Philanthropy). • Links among the mission, programs, and measures must be clearly defined and articulated in order to narrow the number of required indicators. • The measures should be easily collectible and communicable. • The measures should be strategically designed and applicable across the organization at all levels, while also encouraging of operating units to focus on high-level strategies. • Above all, the measures must address progress toward the mission and illustrate whether and how the organization’s actions make a difference.

  8. Social Return on Investment Study of 8 methodologies found the similarity was the concept: Expected Return = (Outcome or Benefit x Probability of Success) Cost A major difference among methodologies is whether benefits are monetized or not. (Tuan 2008)

  9. The principles of SROI SROI was developed from social accounting and cost-benefit analysis and is based on seven principles. These principles underpin how SROI should be applied and are set out in full in the Resources Section (page 80). The principles are: • Involve stakeholders. • Understand what changes. • Value the things that matter. • Only include what is material. • Do not over-claim. • Be transparent. • Verify the result. Principles of SROI (Office of the Third Sector UK) • Involve stakeholders. • Understand what changes. • Value the things that matter. • Only include what is material. • Do not over-claim. • Be transparent. • Verify the result.

  10. 6 Stages in Developing an SROI • Establishing scope and identifying key stakeholders. • Mapping outcomes. • Evidencing outcomes and giving them a value. • Establishing impact. • Calculating the SROI. • Reporting, using and embedding.

  11. Expanded Value Added Statement (EVAS) • An integrated social accounting method, EVAS employs carefully constructed assumptions to quantify, in dollar terms, the social value added that a non-profit or co-op produces. (Mook, Quarter and Richmond, 2007). • Calculating the value of volunteer hours contributed to the organization, or unpaid contributions to other organizations and stakeholders. • Gives clearer picture of the strength and added value of the organization.

  12. On Line SROI Tools • Volunteer Value Calculator • EVAS Toolkit • The B Impact Rating System • New Economics Foundation (UK) Guide to SROI

  13. On Line Resources • Impact Reporting and Investment Standards (GIIN) • Investing for Impact (Social Economy Scotland) • Measuring the Value of Corporate Philanthropy • SROI Primer (London Business School)

  14. More On Line Resources • Investing for Social and Environmental Impact (Monitor Group) • REDF • Social Capital Partners • Carleton Centre for Community Innovation • Social Economy Centre OISE

  15. Conclusion • Blended value requires economic, social and environmental values be measured. • SROI helps organizations understand their strengths. • SROI links mission, activities, outputs, outcomes and impacts. • No one size fits all.

  16. Contact Tessa Hebb tessa_hebb@carleton.ca Director, Carleton Centre for Community Innovation thebb@attglobal.net www.carleton.ca/3ci

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