We all hope we’re making an “impact” but what does that mean, and how do we know our methods are of the utmost effectiveness?
Regardless of the size of your organization or business, it’s important to know if you’re performing well or meeting mission points. And also, to have a clearer idea about “what matters” to you and your stakeholders and community.
Studies have shown the impact of an organization or company continues to become an even larger driving factor for donors and consumers. In fact, more than half of global consumers, and 90% of millennials will pay extra and seek out organizations and companies that have a “positive impact on the world in some capacity.” (more on this in another post!)
Read that again.
Throughout 2020 many consumers spoke with their wallets in support of local businesses, grassroots organizations and places they can see and feel an impact being made. (Whether online or down the street.)
So, are you investing in the right places? Are you even doing what you hoped to do? Thank you notes and Yelp reviews are awesome, but what about the social impact bottom line and frankly, the bank account’s? While you have loyal supporters, as evidenced by donations, purchases and referrals, are you truly delivering on your mission to your stakeholders, community and employees?
There are a variety of metrics that can be used across several organizations to tune into your social impact, financial, stakeholder and employee quality indicators.
This is called a Social Return on Investment (SROI) audit.
Can social impact even be monetized or ranked? Read on!
What does SROI stand for?
Firstly, what is an SROI audit?
Basic level, it’s probably something you’re already doing.
SROI is commonly used to quantify social impact created that otherwise could not be monetized. Have you taken inventory of your entire operation - beneficiaries/consumers, stakeholders, partners, staff? And not just numbers, but what do they think? How do they feel? What do they suggest? What’s your reputation?
Broken down, it covers a few things, like: accountability - governance, transparency employees - compensation, benefits, consumers - beneficial services or products community - suppliers, local, diversity, impact, engagement
This measurement allows organizations to determine whether or not they’re fulfilling their mission and provides proof of results to share. Small business or nonprofit alike, these indicators can help instill trust with the community and your stakeholders, learn where your faults lie (to correct) and what major bragging rights already exist.
Why an SROI audit?
If anything, 2020 underscored the importance of being nimble. And, you’ve probably already evaluated then re-evaluated to meet the ever-changing demands of COVID, the changing marketplace and new unknowns.
So for now, this is a bit of a gut check. Take a pause and get a sense of how you’ve performed, but also how you can - and potentially should - move forward. Using the formula to measure your organization’s performance provides clear indicators of where and how you can improve to increase profit and overall impact.
Here are perspectives to consider: Customer/Community
Internal Business Process
Partners and Competition
An SROI audit removes bias and constructively evaluates factors to see what kind of difference you are making:
Internal staff satisfaction, motivation and effectiveness
External value and relevance of your offerings to your consumers and community (and what they think of you!)
Tangible cost versus intangible benefits gained
Goals and overall mission fulfillment
Good indicators will show where you’re doing well, and where you can improve or shift.
SROI in Motion
Below are a few simple SROI scenarios.
Your business is promoting 50% off drinks to teachers.
Given their need to buy a majority of classroom supplies with their own money, could a back-to-school supplies drive for teachers be of higher value to the community?
As a result of your bigger picture thinking (and targeted campaign), your consumers feel more compelled to support you as they invest in both your business and community. Your pulse on the needs of your community prompt direct monetization and encourage customer loyalty.
(If this is something you’d like to get involved with, get in touch as we have something a bit broader in the works!)
#2 Program Offerings
Your nonprofit program offers resume and interview coaching to veterans transitioning back to civilian life. Is there also a need for interview clothing?
Providing this additional offering meets more rounded-out needs of your beneficiaries that they may have felt to be a challenge, or embarrassed to mention. Proactively offering this shows there are others in the same boat, and can help boost confidence. It also shows you think through all the steps of your programming - not just one aspect. You can also expand by partnering with other nonprofits and small businesses to better serve your communities.
#3 Internal Operation
Your staff’s productivity, communication and commitment are on the decline. When was the last time you invested internally? Offering staff-only events, funding toward professional education, PTO and incentives to support personal health.
The dedication to those employees’ well-being now builds trust, loyalty and a desire to perform. This also helps serve your business as you grow, the institutional knowledge and experience is crucial for expansion and understanding where you came from and where you need to go. This also plays into recruitment and retention program investments.
Perform a Basic SROI Audit
The example below is just one simplified but usable example. There are several ways to perform or create an audit, including ranking and yes/no tick marks. This is a bit more data-driven with the expectation of using numbers to drive more detailed information gathering. It's specificity will serve better as a "note taker" for future reference.
Whichever approach or formula you choose in terms of complexity and comprehensiveness, it must be usable.
10F Communications is equipped to perform in-depth SROI, communications, development and organizational audits.