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W W W. M A I N E B I Z . B I Z 31 J U LY 2 5 , 2 0 1 6 H OW TO M any projects fail to be accepted by the community or encounter unexpected roadblocks, even though they seem profi table on paper. Just because a project has a fi nancial ben- efi t doesn't mean that it is benefi cial overall, or even that it's a good idea. Calculating your proposed project's social return on investment (SROI) can help reveal the true social costs (or benefi ts) of a proposed project, and can be used to mitigate weaknesses, enhance strengths, or compare the net benefi t of multiple projects. For a business, calculating the SROI can help you forge tighter ties with your stakeholders, realize potential synergies and avoid unforeseen pitfalls. Done correctly, a SROI calcula- tion involves much more than sitting behind a computer screen crunching numbers. ere are fi ve main steps to calculating the SROI. 1. Defi ne the boundaries of your SROI. Do you want to measure and document the impact of your project or proposal on the local neighbor- hood? e city? Or statewide? What is the focus of activities? It's also important to consider the time and money your organization can aff ord. Generally, the larger the scope, the greater the need for resources. You will want to be specifi c about what's involved in your project. 2. Identify the key stakeholders. List all who might be aff ected by the activi- ties within your scope, be it positively, negatively, intentionally or acciden- tally. Remember that an ecosystem, a habitat, or even future generations can also be considered stakeholders. If resources allow, invite all stake- holders to the table, or fi nd proxies if they can't be physically present. For example, if a body of water could be aff ected, you might consider inviting a conservation group to the table. 3. With your stakeholders, identify the inputs and outputs of each activity involved in your scope. Inputs can be monetary, such as investment or loans, or non-monetary, such as in- kind donations and volunteer time. Outputs are a quantitative result of an activity. If your activity is food safety workshops, the output might be "held four workshops in one year with 50 people each." Be aware that there is a diff erence between outputs and outcomes. Using the same example, 200 people going through your trainings in one year is an output, but the outcome might be 20% fewer health and safety violations. Another outcome resulting from that same output might be fewer people going to the hospital from food poisoning! 4. Possibly the most challenging step of SROI analysis is to develop outcome indicators, and put a monetary value on those indicators. is is where your stakeholders can help, as those are the people who can identify most clearly the change they have experienced or expect to experience through your project. Possible indica- tors might be found in publicly avail- able data — the number of families participating in SNAP programs, for example — or from primary survey data. ere are several tricky issues here. Outcomes always need to be measured against a benchmark: What would have happened in the absence of the program? ere is always the issue of causality: Can we be sure that the outcome is a result of the program's activity, and not some- thing else? Nonetheless, there are ways of mitigating these diffi culties. 5. e fi nal steps, and ones that are often overlooked, are reporting, using and embedding. It does no good to calculate a SROI if it just sits on someone's desk. It needs to be reported and disseminated, to all your stakeholders at the very least, if not more broadly. e SROI should be used to improve your project's outcomes, not just as window- dressing or a feel-good exercise. e program should be monitored on an ongoing basis, to make sure that the benefi ts are maximized and the costs are minimized. An analysis is a process, not simply a calculation. Done correctly, it can be used to bring about positive change and enhanced shared value. Rachel BouVier, principal o f r b o u v i e r c o n s u l t i n g , c a n b e r e a c h e d a t r b o u V i e r . c o n s u lT i n G @ G m a i l . c o m B Y R A C H E L B O U V I E R Calculate the social return on investment to make better decisions P O R T L A N D , M E | M I L K S T R E E T C A P I TA L .B I Z | 207-358 -790 0 ALTERNATIVE REAL ESTATE FINANCING NO appraisals NO committees QUICK responses QUICK responses QUICK QUICK closings QUICK closings QUICK

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