paper critically evaluates how effective social impact measurement can lead to the legitimacy and prospering of social enterprises (SEs). Effective balancing of economic and social purposes contributes towards high SEs performance and should be mirrored in specific monetarized indicators. There is no doubt that effective measurement of the operations and the outputs of SEs is a step toward achieving the desirable social change and at the same time remaining a healthy and sustainable as an entity. Trade-offs and tensions are inevitable in dual purpose organizations and success is more likely when leaders of SEs address them on hand. I focus my examination on the Social Return of Investment (SROI) framework which was significant developed both from the academic and business community. SROI tool is not just a descriptive report. It is a methodology that turns the benefits of social action into a monetary equivalent. This makes social impact more readily assessable and controllable, especially for financial markets participants like banks and debt providers, who appreciate monetizing. Social Businesses can use this tool in order to keep a sustainable long-lasting operation and to evaluate the outcomes of their social projects. The importance of a more holistic performance measurement system is highlighted across all this thesis. I demonstrate the process of measuring a social impact equal to 4.43 using SROI for a Greek social venture and I identify common misunderstandings and difficulties accompanied with the measurement process.
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Measuring Social Impact – A Key to High Performing Social Enterprises
1. Measuring Social Impact – A Key to High Performing Social
Enterprises
By
Sioutzos Giorgos
Supervisor: Dr. Pavlos Vlachos
This dissertation paper has been submitted to “Alba Graduate Business School “In partial
fulfillment for the degree of MSc in International Business and Management
Αthens
June 2019
64. 4.3. SWOT Analysis
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis on Faros
Organization will help us to get a broader understanding of where the organization is
in terms of developing capacity. As a tool, SWOT analysis is not a complete study of
Competitive rivalry – Medium
Direct competitors-Low
Indirect competitors- High-
Private metal illness support
centres may offer a higher
value proposition to achieve
competitive advantage.
Supplier power (service & materials
providers) – Low
Need to be highly accountable
on expenditures; always looking
for optimization/operational
efficiency
Suppliers might be turned into
sponsors or partners
(advertising, promotion, and
volunteerism)
Collaboration with NGOs may
achieve optimization of
resources
Treat of substitutes –Low to Medium
State may impose regulations with the Law on SE,
thus reducing real income and monopolizing both
educational service and financial support in the
area of social entrepreneurship
Different forms of supporting people with mental
illness may arise.
Buyer power – High
High
unemployment
both amongst
broad population
and vulnerable
groups.
Buyers try to find
the best quality
with the lowest
cost (best value)
Companies that
offer same
services as SE
Faros are looking
for long-lasting
partnership with
customers
Threat of potential entrants – Medium to high
Business oriented SE are increasing.
The Movement from NGO to SE is
common due to legal friendly SE
environment
High social aware entrepreneurs which
combine innovation, creativity, high
technical skills and an altruistic
73. Description Quantity Value
How would you describe the changes that result from
activities after involving your stakeholders?
Numberofpeople
What is the value of
the proxy for the
change per person?
OTCΜ.1.: Reduce financial dependency of people with
mental health issues
5
8.000,00
How much each
beneficiary earns.
OTCM.2.: Improving social accessibility and functionality of
people with mental health issues
5
2.000,00
How much sessions
a beneficiary
should have with a
psychologist to
achieve social
integration.
OTCM.3.: Informing the local community about mental
health issues and change social stereotypes
67.446
Local Active
Population
0,50
How much a leaflet
per person would
be cost
75. The analysis shows a significant income increase for the mental health patience in the
program. In addition to that, increased personal well-being for the families of these
people is estimated and included in the analysis.
The SROI ratio is calculated to be 4.4311
over a five-year period. Thereby, Faros creates
measurable value for their stakeholders and the society of Patras. This proves that the
program creates a positive return on investment of 4.43 euro for every 1 euro input, and
a donation to faros can be considered a solid investment and not just as charity.
When critically evaluating the SROI results. , it should be considered that it has not been
possible to include all positive outcomes. Also, the impact might last for more than five
years and the participants might gain real income increases over time. In a future analysis,
his perspective can be analyzed further.
In calculating impacts, an organization must recognize the contribution made by others
to the outcomes. Attribution also encompasses deadweight (what would have happened
anyway, calculated through the use of available benchmark data and proxies) and
displacement (when the benefits claimed by a program participant are at the expense of
others outside the program).
11
An Excel template of the value map with formulas helping calculate the social impact is used.
http://www.socialvalueuk.org/resource/blank-value-map/