Implementation of SROI in East Asia SROI International Conference - PowerPoint PPT Presentation

Development Prospect and Implementation of SROI in East Asia SROI International Conference 2012 February 17, 2012 Ken Ito , Assistant Professor, Graduate School of Media and Governance, Keio University Masatoshi Tamamura , Associate Professor, Faculty of Policy Studies, Keio University

Ken Ito - Assistant Professor, Faculty of Media and Governance, Keio University - Japan Advisor, Asian Venture Philanthropy Network - 10 years of private sector experience including 7 years in GE Commercial Finance, one of GE Capital in Japan - Director at Center for Social Innovation at Institute for Strategic Leadership (2008 to 2010) - Community Mobilizer, Ashoka Changemakers (2011) - MBA, Thunderbird AGSIM (Arizona, US) - Email : ken.ito@sv-tokyo.org

1. J-SROI Project Joint research by non-profit intermediary (Center for Public  Resource Development), academics(Keio Univ., Tokyo Univ.) and business (Daiwa Securities) To research SROI model and explore possible implementation in  Japanese environment for accelerated growth of social investment Funded by Japan Foundation from 2010-2012  Field Research in US Creation of SROI Study on Study on SROI Model and Europe Case Studies Implementation Model Sep-Dec 2010 Jan-Apr 2011 May-Oct2011 Nov 2011-Feb 2012 • Conduct two • Identify SROI’s days training in • Conduct 20+ • Create 6 SROI possible impact Tokyo interviews on case analysis to Japanese • Literacy review SROI using Japanese environment • Review on case practitioners and case • Build up study researchers in • Organize study strategies to • Comparative Europe and US group to implement SROI study on other • Analysis on the accumulate for growth of methodology on usage. policy knowledge in Japanese social quantitative / /market case analysis sector / social qualitative environment investment evaluation

2. Initial Assumptions  Quantified evaluation of social impact could be key driver to mobilize untapped charity resources into non-profit sector by demonstrating the social impact in numbers  SROI could be particularly useful to attract business resources to invest into social sector  SROI could be also impactful to government sector which seeks productivity growth in social welfare field  SROI could be a sector-wide (or industry-wide) standard to measure social impact  SROI could accelerate investment approach or social investment eventually

3. Initial Research Findings on SROI Major drivers 1. SROI as an effective impact measurement framework • An outstanding tool to design maximized social impact by visualizing and examine co-relation between input, output and outcome • SROI is not a measurement standard, but a standard for measurement protocols for social impact 2. Quantitative analysis as a tool for consensus building and stakeholder involvement • SROI analysis starts from stakeholder analysis and end at feedback to stakeholders to create a consensus on social value among different stakeholders • Quantities measurement to build up set of numbers as “common language” among different stakeholders SROI as a communication framework through impact evaluation

4. Initial Research Findings on SROI - Challenges 1. Challenge on setting a standard of analysis and reporting • More guidelines may be necessary on scope of the analysis or set of assumptions of valuation • Need to ensure the quality of assurance process. Lack of standard may threaten the value of methodology itself 2. Capability issues for smaller size non-profit • SROI analysis need skill-set such as accounting or project management which all the non- profit doesn’t have 3. Hesitation towards quantified evaluation • Traditional non-profit shows hesitation to accept quantified evaluation method because they believe social values cannot be quantified Standardilization and reporting capability as challenges

5. Interviews on SROI Practitioners and Researchers ＃ 所在 団体名 氏名 タイトル 組織タイプ 米国 1 コンサルティング San Francisco SVT Group Sala Olsen Founding Partner 2 中間支援組織 San Francisco REDF Cynthia Gair Managing Director of Programs 3 財団 San Francisco ZeroDivide Paul Lamb / Laura Efurd 4 財団 San Francisco Hewlett Foundation Harold Jacobs 5 中間支援組織 New York Acumen Fund Marc Manara Water Portfolio Manager 6 財団 New York Robin Hood Foundation Michael Weinstein Senior Vice President 7 財団 New York Rockefeller Foundation Antony Bugg-Levine Managing Director 8 コンサルティング New York Jed Emerson 9 大学 New York New York University Jill Kickul Professor 欧州 Social Enterprise Investment Fund 10 London SE Investment Fund Ceryse Fear 中間支援組織 Contract Manager 11 中間支援組織 London CAN Richard Kennedy Social Investment Manager 12 コンサルティング London Nef Consulting Michael Weatherhead 13 中間支援組織 London Bridges Ventures Michele Giddens 14 中間支援組織 London Impetus Trust Julia Grant Portfolio Director 15 財団 London Unltd Katharine Danton Director of Research and Policy 16 シンクタンク London New Philanthropy Capital Tris Lumley 17 財団 London Private Equity Foundation Hearvey Koh 18 中間支援組織 London Social Finance Martin Rich 19 中間支援組織 London SROI Network Jeremy Nicholls 20 コンサルティング London David Carrington 21 中間支援組織 Amsterdam Noaber Foundation Pieter Osthlander 22 コンサルティング Amsterdam Scholten & Franssen Peter Scholten Global Alliance for Banking on 23 Amsterdam David Korslund Senior Advisor 業界団体 Values 7

6. Findings from Interviews in Europe/US Key Questions Background and cause of quantified evaluation of social impact • How SROI helps to pursue organization’s mission and goals? • What are the purpose of SROI analysis? • Who are the subjective of analysis? • What are the challenges for implementation - Reporting Capability • of subjective organizations? Any capacity building efforts? How do you create consensus on the goals of evaluation? • Why not other tool, but SROI? • How do you utilize the SROI reports and process of the analysis? • What are the accomplishment? What are the future plans to develop them further? • 8

7. Background – Charity Market in Japan  Small and fragmented non-profit sector (40,000 NPOs for 0.2% of GDP with average of 1.3 employees/organization)  Strong tradition of cooperatives (JA bank with $800 billion USD asset, Consumer Co-op with more than 20 million memberships) but disconnection with other social sectors  Limited tax benefit for non-profit entity – only 200+ of them allowed for tax exemption for funds raised  Small market for charitable donations -- Ave. giving of \3,166 / year/ household (over $2,000 in US), total size of \850 billion ($11 billion) private giving including corporate donations*2 *1 Ministry of Internal Affairs and Communications (2008) *2 NPO Research and Information Center, Osaka University (2004) Fragmented and small Japanese charity sector

8. Growing SE Sector and Taxation Reform Undefined but growing “Social Enterprise” sector • No official definition of “social enterprise” • Estimated number of SEs as 8,000, size of SEs as \240 billion) *3 • 47% operate as non-profit, 20% as company and 33 % other forms (individual, cooperatives etc.) • Government provide financial support for start-up social enterprises (\7.8B in 2010, \10B in 2011,\3B in 2012) Government’s policy change on charity taxation and Mar 2011 Earthquake • Mar 2011 earthquake raised more than \ 300 billion donations – creating new culture of giving • Tax reform for charitable contribution to non-profit in June 2011 – 50% tax deduction of contribution amount from income tax (up to 25% of one’s income tax). Target to multiply private giving to the social sector *3 “Report on Social Business”, Ministry of Economy, Trade and Industry (2008) Taxation reform for growth of charity market

7. Findings from Interviews in Europe/US Fund Providers Demand Challenge - Pressue on budget - Princple of equal distribution but not - Financial effeciency Government imapct based selection and focus - Need to establish selection criteria for - Lack of sense of productivity commissioning out operations - Shrinking Asset and operation budget - Lower attention to Impact if donor is - Needs for additional fund mobilization Foundation not imapc focus or not focused on from business sector quantitative measurement of Impact - Impact based grant as a part of CSR - Focus of CSR could be determined in strategy Business relation with its core business but not - Familiarity on investment like approach impact focus (for financial industry such as PE/VC) 11

7. Findings from Interviews in Europe/US Fund Recipient Demand Challenge Traditional non-profit is less Lack of professional expertise to focused on and it creates more conduct analysis in-house or Non-profit demand for SROI as lack of budget to outsource the management capacity building analysis tool for maximized social impact Some assume financials and Hybrid Non-profit Needs for social KPI apart from other management KPIs are and Social financial index such as revenue good enough to demostrate Business or number of customers their impact 12