SROI to IMN Case Study 4: Newington Credit Union Limited 

Credit Unions are encountering rising competition from banks, credit card companies, fintech, and other financial providers. While several weak credit unions merged with stronger ones under such intense pressure, many remainders struggled to adapt to a changing landscape by commissioning accredited practitioners with Social Return On Investment (SROI) to conduct professional analyses. As one of these organizations, Newington Credit Union (NCU) expressed strong interest in knowing how much impact they bring and also room for improvement.

The number of credit unions on the island of Ireland was remarkably huge. But in recent years, growing competition from other financial providers, including banks, credit card companies, and ‘fintech’ forced many weaker credit unions to merge with stronger ones. Several credit unions endeavored to determine new business models to address this challenge while staying within the cooperative principles and values to which credit unions shall adhere. Accordingly, they commission impact evaluation practitioners to apply the Social Return on Investment (SROI) approach to analyze the impact credit unions bring.

Project description

Newington Credit Union (NCU) is one of the credit unions actively promoting reform. In addition to information about its actual role in its community, members’ feedback, and room for improvement, the NCU also intends to share learnings from this research with other counterparts in Northern Ireland so that they may begin to measure better and manage their impact. This article’s timeframe for analysis comprises the period from 1 October 2020 to 30 September 2021.

Analysis

The original assessment report applying the Social Return on Investment (SROI) analysis approach is turned into a five-dimension table below, in alignment with the impact management norms framework set by the Impact Frontier.

The original report showed the involvement of 11 types of stakeholders in the Newington Credit Union (NCU) activities, and each identified one change experienced. Of the 11 outcomes, only one (e.g., less disposable income) is negative, and only two are attributable to the Newington Credit Union. Regarding impact value, “more disposable income” is the most material outcome the Newington Credit Union created for stakeholders. In this conversion report, only six stakeholders received discussion (see Table 1) because they experienced changes of the highest values. 

The WHAT dimension, the first dimension of the IMN framework, explains the outcomes resulting from intervention activities and involves five categories of data: outcome level in period, outcome indicator, outcome threshold, the importance of the outcome to stakeholders, and SDG. These data correspond to the second step in analyzing using the SROI approach, which is mapping outcomes and can be found in Chapters 5 (Determining the Materiality of Stakeholder Outcomes) and 6 (Valuing Material Outcomes and Impact) of the original report. As with most analysis reports, the initial report explains the Outcome Indicator but does not provide information regarding the Outcome Level in Period and Outcome Threshold. As for the Importance of Outcome to Stakeholders, both Loss of Potential Income deduced from NCU data and Benefits Payments to Claimants Deduced from NCU Data were ranked first regarding the estimated outcome value. Finally, although not specified in the original report, intervention activities by NCU correspond to SDG 9: Industry, Innovation, and Infrastructure (See Table 1).

The WHO dimension, the second dimension of the IMN framework, describes those affected by intervention activities and includes four data categories: stakeholder, geographic boundary, outcome level at baseline, and stakeholder characteristics. In terms of content, these data correspond to the first step in analyzing using the SROI approach: establishing scope and identifying stakeholders. This information can be found in Chapter 2 (The Research Process) of the original report. As the review indicates, there were no geographical differences among this group of stakeholders, the Members. However, variations in the experience of conducting integrated transactions with Newington Credit Union may lead to further categorization. Also, as with most SROI reports, the original report does not offer Outcome Level at Baseline information (See Table 2).

The HOW MUCH dimension, the third dimension of the IMN framework, describes the importance of outcomes derived from intervention activities and involves three data categories: scale, depth, and duration. In terms of content, these data correspond to the third step in analyzing using the SROI approach: Evidencing outcomes and giving them value. As for the relevant discussions, they can be found in Chapters 6 (Valuing Material Outcomes and Impact) and 7 (Calculating the Social Return) of the original report, but the exact figures are only available in the Value Map that needs to be requested from the original report’s author. Upon examination, the Value Map provides the required data for two categories, Scale and Duration, but leaves out the one for Depth (See Table 3).

The CONTRIBUTION dimension, the fourth dimension of the IMN framework, clarifies whether and to which extent intervention activities lead to outcomes, involving four data categories: deadweight, attribution, displacement, and dropoff. As for content, these data correspond to the fourth step in the analysis using the SROI approach, Establishing Impact, and can be found in Appendix 5 (Detailed Valuations). Overall, these figures are reasonable (See Table 4). 

The RISK dimension, the final dimension of the IMN framework, explains possible risks of intervention activities involving two data categories: type and level. In the IMN framework, type is categorized into nine categories, while level is classified into three types: high, medium, and low. None of the six stages of SROI directly address differentiating risk types and levels. Although not explicitly stated, the discourse in the original report suggests that two types of risks may affect the value estimation of outcomes derived from intervention activities by Newington Credit Union: External Risk and Efficiency Risk. Both risk levels are considered high (See Table 4).

Overall, the original report was of good quality and mostly met the requirements of the current SROI framework. However, as shown in this conversion report, some materials (e.g., information on Outcome Level at Baseline) required following the Impact Management Norms (IMN) frameworks are absent. Moreover, the original report does not include the value map, although the analysts will provide it upon request. Given the importance of the value map for impact measurement, Social Value International (SVI), which is in charge of certification, may have to consider further institutionalizing the presence of analysis reports applying the SROI approach.