SROI estimates for CCCN pilot

Transcription

1 millions Social Return on Investment (SROI) analysis of the CCCN pilot programme This analysis uses New Economics Foundation s Social Return on Investment (SROI) methodology to conduct a basic SROI analysis of the Church Credit Champions Network (CCCN) pilot programme. 1 SROI measures the wider impact on the community, and shows how much social value is created for every pound invested, expressed as a ratio. We limited the analysis to the two main target outcomes for which we have robust data from the programme s monitoring and reporting system: 3,000 more credit union members, increasing access to affordable credit 300 trained Credit Champions, increasing regular volunteering Having identified these outcomes, we have to make assumptions about how much of these can be attributed to the programme itself and how much would have happened anyway. Finally, we attach values to the outcomes and calculate the total present value over the three-year life of the programme. Further details of the methodology are provided below. The present value of the benefits is forecast to be approximately 2.2 million over three years and the total discounted cost is 288,000. This produces an SROI ratio of 1:7.5, based on the assumptions made. So, for every 1 invested, there is an expected social return of more than 7. The current SROI, based on the outcomes achieved to date, is 1:6.6 (with an estimated social return of 944,000 and costs of 142,000). 2 Further details of the calculations is available on request: tom.sefton@churchofengland.org SROI estimates for CCCN pilot Whole pilot programme Pilot to date (end June '15) Total cost Community Benefit of more affordable credit Total social value (including volunteering) 1 See: 2 Up to the end of June 2015, the CCCN has generated 911 new credit union members and 146 Credit Champions, exceeding the intermediate targets set for this stage of the pilot. 1

2 It should be noted that these are provisional estimates, intended to act as a starting point for a more comprehensive evaluation of the programme when it is rolled out more widely. However, we believe the underlying assumptions are conservative and that the actual SROI is likely to be even higher. Underlying assumptions a) Attribution SROI analysis requires an assessment of the extent to which a given outcome is due to the programme intervention, and how much is due to other people or organisations. The programme s reporting system is designed to track the number of new credit union members joining through the Network, using CCCN stickers on the application forms. 3 Credit Champions are recruited and trained through bespoke training courses run by CCCN area coordinators, who then encourage volunteers to take an active role in promoting the local credit union. It is possible that some churches are acting directly in response to the Archbishop s call to support credit unions in July 2013, rather than the additional efforts of the CCCN. According to the Church in Action survey (January 2015), 17% of parishes were involved in some way in supporting their local credit union, including churches outside the CCCN pilot areas. On this basis, we assume that 83% of the outcomes can be attributed to the programme itself. Outcome Indicator description Attribution proportion Increase in credit union Access to more affordable credit 0.83 membership Increase in regular volunteering Number of trained Credit Champions 0.83 b) Deadweight SROI also needs to take account of outcomes which would have happened anyway, in the absence of any intervention. Some people would have joined their credit union without the additional impetus provided by the CCCN or the Archbishop s intervention, and some of the Credit Champions would be volunteering in other ways if the opportunities created through the CCCN were not available. Our assumptions are based on survey data on credit union membership and volunteering rates among regular churchgoers. Deadweight description Proportion of people who join a credit union each year (membership rates are around 3% of UK population ABCUL) Proportion of practising Christians who volunteer at least once a year IPSOS Mori poll for CUF (2013) Deadweight proportion < This is likely to be an under-estimate as it doesn t capture the wider impact of CCCN s awareness-raising activities. 2

3 c) Drop-off and benefit period Drop-off refers to the rate at which outcomes decrease over time as new members leave the credit union and people stop volunteering. Attrition rates for UK banks average around 5% a year, but we use a much more conservative estimate of 15% for credit unions. For volunteering, we assume a drop-off rate of 33% a year; the average volunteer turnover rate in a year was 23% for a group of medium- and large charities surveyed in , so again this assumption is conservative. Benefits are only counted over the three year period of the pilot, although the key outcomes would be expected to continue beyond the initial intervention. d) Calculating input costs The total cost of the CCCN pilot is 306,088 over 3 years. This covers the cost of employing full-time area coordinators in each of the three pilot dioceses, as well as the cost of developing training and other resources and other central management costs. However, it excludes the resources provided in kind by churches, credit unions and other participating organisations. In calculating the SROI, future costs are discounted over time, using the same discount rate as for the social benefits (see below). e) Calculating financial proxies For both outcomes, we have used financial proxies from existing sources. The benefits of increased credit union membership are based on a measure of Community Benefit developed by London Plus Credit Union. By providing an ethical alternative, credit unions enable their local community to move away from high cost lenders such as payday lenders, doorstep lenders, pawnbrokers, and illegal money lenders. Instead of draining resources from the local economy, the smaller amount of interest paid on credit union loans is entirely re-invested in the community. By comparing the cost of credit union loans with equivalent high-cost credit alternatives, LPPC estimate that they save the community an average of 1,057 for every 1,000 they lend. The average amount borrowed by credit union members in England is 389 a year, which translates into a Community Benefit of 411 a year per member. So, for every person who becomes (and remains) a credit union member as a result of the CCCN programme, we allocate a social benefit of just over 400 a year. 5 Credit unions also benefit the community The implicit assumption is that new members have the same borrowing habits as existing members. An alternative way of looking at this is that new members increase the pool of savings available to lend out to other members, and thereby indirectly generate savings for the wider community. Participating credit unions will have a record of the borrowing and savings behavior of new CCCN members, so we will be able to refine these assumptions in due course, based on actual data from the pilot programme. 3

4 in other ways, for example by improving financial capability and community cohesion; these are harder to value and are not included in our estimates. For volunteering, we use the community investment values from HACT s Social Value Bank. This is an estimate of the value that people gain (on average) in terms of enhanced life satisfaction or well-being through regular volunteering, based on rigorous statistical analysis of large scale surveys. 6 Indicator description Financial proxy description Proxy Access to more affordable credit Number of trained Credit Champions Interest rate savings on credit union loans (London Plus estimates of Community Benefit see Annex) Regular volunteering (Social Values bank weighted average for London and outside of London) 1,057 for every 1,000 loaned (or 411 a year per CU member) 2,689 f) Discount rate and present value The discount rate is the interest rate used to discount future costs and benefits to their present value. We use a discount rate of 3.5%, following the guidance in HM Treasury s Green Book. The present value is the cumulative value of social benefits over time, taking into account the discount rate. Whilst the SROI is often calculated over a 5 year period, we have taken a conservative approach and calculated it over a 3 year period. The SROI ratio is the ratio between the total net present cost and the total net present value i.e. how much social value is calculated for every 1 invested in the programme. The higher the SROI, the better. As well as estimating the expected SROI of the whole programme assuming the targets are met, we also estimate the current SROI, based on the outcomes achieved to the end of June September For more information, see: 4

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