SOcial return on investment – qmansys project implemented by nasscom foundation

SOCIAL RETURN ON INVESTMENT –

QMANSYS PROJECT IMPLEMENTED BY NASSCOM FOUNDATION

A CSR Project of Firstsource Solutions Limited

Report Prepared By

Social Audit Network, India

Assessing Social Impact using Social Return on Investment (SROI) -

Training and Empowerment of 150 youth in Siliguri by Qmansys

Introduction

The SROI methodology serves as a valuable tool for elucidating and comprehending the

financial value of outcomes resulting from social interventions. It quantifies, in monetary

terms, the social value generated for every rupee invested in a project or intervention. Unlike

traditional economic analyses, SROI goes beyond mere investments and outputs, centring its

focus on the value of outcomes or changes experienced by stakeholders.

This methodology incorporates a wide array of social outcomes, including intangible benefits

like increased self-confidence and communication skills, alongside more tangible outcomes

such as an increase in earning capacity. SROI analysis integrates both quantitative and

qualitative data gathered from surveys, providing a comprehensive account of the impacts

generated.

The culmination of an SROI analysis is an SROI ratio, which compares the investment made to

the demonstrable financial value of social outcomes reflected in monetary terms. It highlights

the financial benefits derived from social investments made.

It is crucial to understand that while SROI enables the assessment of social initiatives in terms

of social outcomes expressed in financial returns, the calculated social value return is not

synonymous with the creation of spendable currency. Instead, it aids in better understanding

the value of social outcomes using financial measures, as opposed to other economic

indicators. By estimating this value through financial proxies and amalgamating these

valuations, an SROI analysis provides an approximation of the total social value created by an

intervention.

The SROI calculation given below is for the CSR initiative, Skilling youth on Green Technology

Project implemented by NASSCOM Foundation for 150 beneficiaries in Siliguri, West Bengal,

is based on a total budget (input value) of Rs 16,08,200 (Sixteen Lakhs, Eight Thousand, and

Two Hundred rupees).

I. Step 1. Establishing scope and identifying stakeholders

The stakeholders considered for the SROI were

 150 youth who have completed the training on ATL LAB implementation, Electric

Vehicle Chargers Infrastructure and 5G technology at Siliguri, West Bengal. Of them,

100 youth were placed.

II. Step 2. Mapping outcomes

The outcomes represent significant changes observed in the participants who have completed

or are currently undergoing the course, and these changes can be quantified financially. From

a myriad of experiences, the most crucial outcomes have been identified for inclusion in the

SROI analysis. The primary goal of this program is to enhance the skills of rural youth in green

technology, electric vehicle (EV) technology by harnessing the power of technology.

i. The proposed project outcomes were:

 The beneficiaries will have the capability to apply their learnings from the green

technology effectively, leveraging it to improve their livelihoods.

 All participants are expected to experience an increase in their income, reaching 100%

employment.

 Enhanced levels of confidence and happiness are anticipated for all participants.

 Every individual involved is anticipated to contribute towards the improvement of the

environment within their respective communities.

The Impact map:

Positive outcomes experienced by key stakeholders, who are the youth who attended the

training are mapped below.

ACTIVITY

INPUT

OUTPUT

OUTCOMES

IMPACT

Training on ATL

LAB

implementation,

Electric Vehicle

Chargers

Infrastructure

and 5G

technology

Training,

mentoring

150

youth

trained

100% youth trained

understood the

technology

New avenues of

jobs created.

Huge scope of the

subject knowledge

to be utilised to

benefit local

communities.

Knowledge on

technology of the

future.

100% youth trained

know how to

implement the

technology in their

line of work

More people are

aware of

environment friendly

technology options

and its prospects.

Increased interest in

participation in

similar jobs.

Environmental

sustainability.

Placement

Mentoring

Participants and

offering them

guidance and

support

Connecting

organizations

in the

area/region

to improve

placement

prospects

and fill need

100

youth

placed

100 youth placed in

the same field they

are trained in

Rs 12,000 average

income earned per

month

Increased

knowledge of

financial literacy

aids

Increase in

number of jobs

created in the

area/region.

100 youth reported

increased confidence

levels and happiness

levels

Improved family

income

Increase in

wellbeing of family

and community

During the stakeholder consultation, the participants were asked whether they had

experienced these outcomes before and after the training.

III. Step 3. Evidencing outcomes and giving them a value

This step determines how stakeholders experience the listed outcomes and establishes the

financial value of each mapped outcome. The following outcomes were observed during our

interaction with the stakeholders.

S. No

Key Outcome

Key area of focus

Increase in income levels of each trainee

Average salary after placement

Increase in confidence and happiness Levels

Self-reported

Capability to make a positive impact on the

environment in their area of residence.

Increased earning aspirations

Creating a new need in the market

Tech innovation

Networking Opportunities

However, only the top 3 outcomes were considered for the SROI study. They are as follows.

Outcome No

Key Outcome

Increase in revenue

Increase in confidence and happiness Levels

Capability to make a positive impact on the environment in their area

of residence.

IV. Step 4. Establishing impact

This step involves considering what other elements are part of the change experienced by

Participants. They include:

 Deadweight –an estimation of the value that would have been created if the activities

from the program did not happen.

 Displacement – an assessment of how much of the activity displaced other outcomes.

 Attribution – reflects the fact that the investment and core program activity is not

wholly responsible for all of the value created.

 Drop-Off- refers to how long an outcome lasts for and recognises that outcomes may

continue to last for many years but in the future may be less, or if the same, will be

influenced by other factors.

These elements are applied as discounts to the value included in the SROI analysis (expressed

as percentages). They help ensure that the SROI value is not over-claimed, and provide a

‘reality check’ on the actual impact of the social investment. These values have to be gathered

during stakeholder consultations.

i. Deadweight

The % of Participants who were confident that they would have got the skills on their own

volition was the value assigned for Deadweight. The completed Participants were asked a

question- What would they have done had they not joined the course - for which the following

were the responses.

• Outcome 1: According to the conducted interviews, no similar programs had been

implemented in the program area prior to this initiative, marking it as the first of its

kind. Consequently, a 5% deadweight was assigned to this outcome.

• Outcome 2: Stakeholders universally expressed increased satisfaction and

confidence, attributing it to their enhanced earning capabilities and financial

independence (not being reliant on their family). Previously reliant on meagre

incomes from the MNREGA scheme, they now reported a positive shift. As a result, a

5% deadweight was assigned to this outcome.

• Outcome 3: The program was acknowledged for its notable impact on the

community's awareness. Before the students were placed, no other organization

operated in the same field and hence, the villagers were unaware of the benefits of

the technology, justifying a 5% deadweight allocation for this outcome.

ii. Displacement

Displacement is the positive impact of one stakeholder at the cost of a negative impact on

the other stakeholder.

• Observations revealed that there were no other centres providing comparable youth

development programs in the specified areas. Consequently, a 10% displacement rate

was presumed.

iii. Attribution

The Participants were asked whether they were aware of any similar skill development

centres in the neighbourhood.

Outcome 1, 2, 3: None of the youth knew what green technology, EV was. Negligible to

marginal prior experience. Hence, the value for attribution was assigned as 10%.

iv. Drop-off

The Participants were also asked about the duration they would remember or use the skills

learnt. All the respondents had said that the skills learnt – both technical and entrepreneurial

would be useful to them for life.

 The duration of the skill was assumed to be for 5 years as that is the maximum that

can be assumed in an SROI calculation. Based on the above findings, only a marginal

5% dip in their knowledge and skill-sets if any, is envisaged.

 Hence the drop off rate is calculated to be 5% for each of the envisaged outcomes.

V. Step 5. Calculating the SROI

The last step in an SROI analysis is calculating the SROI ratio. The ratio is calculated by

multiplying the number of stakeholders achieving an outcome by the value of that outcome

(financial proxy), and then discounting for impact. All outcomes are then added together for

the total present value, which is divided by the total investment.

The financial proxy was based on the feedback received from the stakeholders during the

consultation with them. They were asked to rate their outcomes based on ratio. The financial

proxies used were calculated on a rating basis. Pro rate of 3:2:1 assumed to be reasonable for

outcomes 1,2 and 3 respectively. All the costs detailed below are for one person.

Outcome

Financial Proxy

Reason for assigning the

value

Ability

to use the learnings

to enhance their

livelihood and income

Rs 12,000

Average salary per month

after the training was Rs

12,000 (Rating 1)

Increase in happiness and

confidence levels

Rs 8,000

Consultation with youth

(Rating 2)

Triggering consciousness on

the benefits of Green tech

for environment

Rs 4,000

Consultation with youth

(Rating 3)

SROI Formula

 SROI = Total Present Value of social value/Net Present Value of the investment

 Total PV of Social Value = Quantity of outcome * Proxy Value * (Attribution –

Deadweight – Displacement – Drop-off for each year)

 The cost per learner*no. of Participants/completed Participants was used to calculate

NPV of Investment

Some of the assumptions taken were as follows:

 The client consultation involved a Focused Group Discussion that involved 3 youth.

The answers are assumed to be representative.

 The average income was assumed as 12, 000 per month

 The financial proxies, percentage adjustments for deadweight, displacement,

attribution and drop off are assumed to be reasonable

 The outcomes would last for five years and hence the cost id calculated for 5 yrs

SROI Calculation

Description

Qty

Value

Total cost

for 5 years

Who

else

contrib

uted to

the

change?

What

activity

did you

displace

What

would

have

happen

without

us?

Does

the

outco

drop

off in

future

years?

Total PV

(present

value)

Increase in

income

100

12,000

60,00,000

10%

43,86,150

Increase in

happiness and

well-being

100

8,000

40,00,000

10%

29,24,100

Triggering

consciousness

on the benefits

of Green- tech

for

environment.

150

4,000

30,00,000

10%

21,93,075

Total PV (Present Value) = 95,03,325

Description

Value (Rs)

Input Value (Spent by First Source) (IV)

16,08,200

Total Present Value (TPV)

95,03,325

Net Present Value (TPV- IV)

78,95,125

Social Return on Investment (PV/NPV)

5.91

SROI Interpretation

For every one rupee spent on the project, a social value of 5.91 was generated through the

project. This SROI suggests that the investment is likely to continue generating social value

over time, potentially leading to sustained positive outcomes for the participants who were

trained. Overall, an SROI of 5.91 indicates that the investment is generating substantial social

value relative to its cost, suggesting a potentially effective use of resources in terms of social

impact.