Public Housing Authorties Need to Start Using Social Return On Investment!

“Our program to help seniors has really done a lot to improve the morale in our senior community!”  I heard this as I sat at a NAHRO conference several years ago and thought to myself, “How the hell do you know?”  It’s not that I questioned the value.  In many ways I believe programs to help cut back on senior loneliness are much more valuable that the work programs deployed by housing authorities across the USA.  My skepticism always laid with the fact that nobody who made these claims ever tried to put some type of quantifiable value to these statements.  Then again, how do you measure a senior citizen saying, “I am not so lonely anymore”, or I now spend four hours a week learning a craft or helping assist others.”  I thought about this a lot within my own career.  I remember speaking to a manager of a very famous social program within a housing authority.  He told me, “We cannot simply look at the earned income of the family to determine success.  How about the children that are not scared about where they are going to sleep from night to night?”  Point taken.  The question still remained to me, how can we put a value to this.  Some may say the action alone is proof enough.  In the ever changing data driven world, I disagree.  In fact, I strongly disagree!  Why?  We need to brag!  We need to show that programs that do not produce clear cut numbers may indeed be worth continuing.

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In the late fall of 2015 I took a short trip to Manchester, England to learn about a system that looked like it might be a solution to the questions posed above.  The program is called Social Return on Investment or SROI for short.  It comes out of San Francisco but the Europeans seemed to do a better job integrating it into their social services culture then us in the USA.   My main goal in taking this trip was to see if this methodology is something that makes sense for public housing authorities in the USA.  A friend and colleague in Scotland advised me of SROI and how his social housing company used it on a regular basis to measure added value of programs.  What is SROI you ask?  According to the website Social Value UK,  “Social Value is the value that our stakeholders experience through changes in their lives. Some, but not all of this value is captured in market prices. It is important to consider and measure this social value from the perspective of those affected by an organisation’s work.”  The aim is to include the values of people that are often excluded from markets in the same terms as used in markets, that is money, in order to give people a voice in resource allocation decisions.  At the end of a SROI analysis you will come out with a ratio that shows how many dollars in value you get back for every dollar invested.

That means that you not only count the actual value your programs create like leveraged dollars or new earned income by participants but other items that are not so tangible.  I must admit this abstract area gave me the biggest headache.  I arrived to the Social Value UK training on a Wednesday morning and this is where the education began.  Unlike standard metrics used at public housing authorities in the USA to capture value or to grade a social program, you need to extensively work with partners, participants, residents and staff to truly understand the real impact of your programs.  SROI goes further than just social accounting and allows an agency to put a story together about the entire program and how all aspects of it add up to a certain overall value.  In this model, you will work with participants to actually put a financial value to things that in the past we usually would not.  For example, if you create a program that cuts back on loneliness for seniors you might not be able to easily decide the value.  With SROI you will work with participants to put a monetary value to the decrease in loneliness.  You could work with a sub-group and ask them how much they would be willing to pay for the increase in quality of life that they received from this program.  Using this method, you can finally put a value to the most important part of the program.

Ok, I can predict your response.  “That seems like an awfully soft measurement system and is wide open to criticism and critique.”  I agree.  However, I will use the response of a social housing expert from Glasgow, Scotland to respond.   Craig Sanderson the CEO of the Link Housing Group in Glasgow owns around 40 years of social housing experience.  He responds to this question in an article by saying, “The system is open to criticism because we are putting a financial value to something that we have not put one to in the past.  The right thing to do is not to pull back but to push forward so we can continue to debate, develop and move this methodology forward as an accepted form of valuation.  In these times where subsidies are being cut, we need to now more than ever demonstrate the value of our programs.  I asked a similar question to the teacher of our three day SROI training in Manchester.  Using the same example of an elderly program designed to cut back on loneliness, he asked me the following question.  “Would you argue against an elderly person saying that a program has added meaning to his or her life?  Would you not say that there is a value to that?  If you agree that there is a value, working with those affected by the program can now help you determine what the value of that change is.”  I believe the explanation is ironclad.  Yes, the numbers can be opened up to debate but let’s start the damn debate!

Do not mistake SROI as a calculator to only justify your social programs within the housing authority.  SROI may do this but it actually falls in line with more sophisticated process improvement methodologies like Six Sigma Lean.  SROI as a tool allows you to look at your social programs and decide if you are getting the most bang for your buck.  I argue that outside of SROI, public housing authorities are almost devoid of a method for comparing such diverse social programs like homeless help for ex-convicts vs. a program helping elderly with loneliness.  SROI can allow you to look at all of these programs in a systematic way and determine your total social return on investment.  It takes into account many of the standard ways of valuation but also goes outside of the box to help you put a value to those softer areas that we in the public housing realm never could really put our fingers on.  Using this method may help a housing authority determine where to invest more money or perhaps even cut back or cut other programs.  In reality, don’t we want to make the most of our limited funds?

While SROI is not being used in the USA as far as I know, our friends in the UK are developing this tool in in depth.  Doing a SROI calculation is not simple and training is needed.  In addition, the time and resources needed to develop SROI calculations are real.  As we become more data and numbers driven and grants become more competitive, having SROI analysis in the back pocket will allow us in the affordable housing industry to not only show the true value of our programs but to also decide internally what programs our giving us the best value.

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