Why is financial management important to everyone in your organization, in your personal and professional development?
In the field of public health, we not only work in solo of expertise, but also share our findings across different realms aiming to improve population health locally, domestically and internationally. To drive change and sustain change, financial management is an essential key to understand ‘whether program/policies/projects’ are worth investing in before we start discussing on how to ‘finance them.’ In a tight economy with constraint resources, it is not uncommon that the stakeholder’s decision-making is influenced by finances (or the lack of finances).
However, using the ‘financing reason’ as the first financial management tool is not usually the most effective approach. Instead, using the return on investment (ROI) as a financial management tool to assess whether or which project(s) are worth investing based on common metric that bring benefits and social value can help stir effort, time, and resources to support these programs, which is the new money mindset: Social Return on Investment (SROI).
Social Return on Investment (SROI) is a framework for measuring and accounting value, rather than money. There are two types of SROI: (1) Evaluative, which is conducted retrospectively and based on actual outcomes that have already taken place, and (2) Forecast, which predicts how much social value will be created if the activities meet their intended outcomes.
Why Use SROI? Assessing the SROI prior to implementation of polices/programs/project, can help your organization improve services by:
- facilitating strategic planning to maximize the social value an activity creates.
- helping you target appropriate resources at managing unexpected outcomes.
- identifying common ground between what an organization wants to achieve and what its stakeholders want to achieve, helping to maximize social value.
Instead of focusing on only the money (or the lack of money), assess the ‘benefits and social value’ in your decision-making. Will this make a difference? and to whom?