As austerity budgeting becomes the order of the day, both at political level in the Big Society and other programmes, and as a response to our increasingly measurement-focussed society, outcomes evaluation is taking big strides forward.  This, in certain of its guises, can become a key part of the response to ‘how do we know what to do and what to drop?’

Outcomes should be considered in any transactional decision: that is one in which you decide whether to undertake a project, a restructuring, an acquisition, divestment or merger, or a refinancing. The greater the social, environmental and economic impact of what you do, provided it is in line with your objects, then potentially the more important it is to do it.  If you balance this with the cash cost or benefit arising from it, and the medium and longer term effect on mission, values, personality, and intellectual property, you have a sound foundation for decisions.

One methodology has gained the mainstream in financially-measured outcomes evaluation: Social Return on Investment (SROI).  It takes the outcomes - the change experienced by a beneficiary group – and puts financial proxies against each.  It then deducts deadweight (what would have happened anyway), alternative attribution (that element of the change that is fairly due to others’ activities) and displacement (dis-benefit arising).

As New Philanthropy Capital observed in their April 2010 positioning statement, SROI, recognised increasingly widely following the Cabinet Office publication on it last year, is an ‘incredibly useful tool.’