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

• Conduct two

days training in Tokyo

• Literacy review
• Review on case

study

• Comparative

study on other methodology on quantitative / qualitative evaluation Study on SROI Model

• Conduct 20+

interviews on SROI practitioners and researchers in Europe and US

• Analysis on the
• usage. policy

/market environment Field Research in US and Europe

• Create 6 SROI

case analysis using Japanese case

• Organize study

group to accumulate knowledge in case analysis Creation of SROI Case Studies

• Identify SROI’s

possible impact to Japanese environment

• Build up

strategies to implement SROI for growth of Japanese social sector / social investment Study on Implementation Model Sep-Dec 2010 Jan-Apr 2011 May-Oct2011 Nov 2011-Feb 2012

• 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
• r 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

7

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

• 5. Interviews on SROI Practitioners and

Researchers

8

• 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
• f 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?

Key Questions

• 6. Findings from Interviews in Europe/US

• 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

*3 “Report on Social Business”, Ministry of Economy, Trade and Industry (2008)

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 Taxation reform for growth of charity market

11

Fund Providers

• 7. Findings from Interviews in Europe/US

Demand Challenge Government

• Pressue on budget
• Financial effeciency
• Need to establish selection criteria for

commissioning out operations

• Princple of equal distribution but not

imapct based selection and focus

• Lack of sense of productivity

Foundation

• Shrinking Asset and operation budget
• Needs for additional fund mobilization

from business sector

• Lower attention to Impact if donor is

not imapc focus or not focused on quantitative measurement of Impact Business

• Impact based grant as a part of CSR

strategy

• Familiarity on investment like approach

(for financial industry such as PE/VC)

• Focus of CSR could be determined in

relation with its core business but not impact focus

12

Fund Recipient

• 7. Findings from Interviews in Europe/US

Demand Challenge Non-profit Traditional non-profit is less focused on and it creates more demand for SROI as management capacity building tool for maximized social impact Lack of professional expertise to conduct analysis in-house or lack of budget to outsource the analysis Hybrid Non-profit and Social Business Needs for social KPI apart from financial index such as revenue

• r number of customers

Some assume financials and

• ther management KPIs are

good enough to demostrate their impact

• 8. Summary of Research Findings from

Europe/US Practices



Implementation of SROI relying on the stakeholders if they can share the value behind the SROI concept



SROI is not for everyone -- Agreement between donor and recipient critical to create opportunities for SROI to be fully utilized - such as investor mindset donors and social enterprise with strong desire to demonstrate productivity as a typical case



Government sector has incentive for SROI implementation because of budget pressure and requirement for enhanced accountability to report social outcomes



Foundations shows interest if they have strong needs for raising external funds, or if they have donors or board members with business background

Acceptance of SROI in Europe/US and its implication

Right combination of stakeholders makes SROI work

• 9. SROI Implementation in Japan



Center for Public Resource Development



Keio University



Meiji University



International Development Center of Japan

Research Projects Pilot Implementations / Feasibility Studies



Microsoft Japan



Created SROI case study on its grantee



Ministry of Education



Feasibility study to evaluate social impact of R&D program for science and technology at National Institute for Science and Technology Policy



Pilot project by Research Institute of Science and Technology for Society with Keio University



Ministry of Health, Labor and Welfare



Conducting pilot program to evaluate social impact of elderly care services (Conducted by Nomura Research Institute)

• 10. SROI research and practice

in East Asia

• Meiji University (Tokyo, Japan)
• Keio University (Japan)
• Nomura Research Institute

(Japan)

• International Development

Center of Japan(Tokyo, Japan)

• Social Resources Institute

(Beijing, China)

• Korean Advanced Institute for

Science and Technology (Korea)

• Busan University (Busan, Korea)
• Work Together Foundation

(Seoul, Korea)

• Hong Kong Council for Social

Services (Hong Kong)

• Institute of Social

Entrepreneurship Asia (Philippines)

• 11. Summary

Impact of SROI : Enables Cross Sector Communication for Maximized Social Impact

• SROI works as analysis tool for maximized social
• utcome planning for optimized resourced allocation

as well as stakeholder involvement

• Key factor for successful implementation would be its

focus on creation of common language among different stakeholders in the process of quantitative analysis Strategies for Market Penetration

• Identify the demand for SROI based on the needs of

different stakeholders and their context

• Create cases by carefully matching the needs and

demand of funders and fund recipient

• Establish operation know-hows in local context (such

as to overcome hesitation on quantified evaluation)