Glossary Of Terms Flashcards
Attribution
An assessment of how much of the outcome was caused by the contribution of other organisations or people
Cost allocation
The allocation of costs or expenditure to activities related to a given program product or business
Deadweight
A measure of the amount of outcome that would have happened, even if the activity had not taken place
Discounting
The process by which future financial costs and benefits are recalculated to present day values
Displacement
An assessment of how much of the outcome has displaced other outcomes
Distance travelled
The progress that a beneficiary makes towards an outcome ( also called intermediate outcomes)
Drop-off
The deterioration of an outcome overtime
Duration
How long, usually in years, an outcome last after the intervention, such as the length of time participant remains in a new job
Financial value
The financial surplus generated by an organisation in the course of its activities
Financial proxy
A financial proxy is a monetary representation of the value of an outcome
Financial model
A set of relationships between financial variables that allow the effect of changes to variables to be tested
Hedonic pricing
Commonly used in evaluations of housing and employment markets, hedonic pricing uses price differences between otherwise identical goods to estimate the values of other factors. For example, two houses may be identical, but located in areas with different crime rates. The differences in value between these houses can be used to estimate how much people are willing to pay to live in an area with low crime rates. Similar, the value of characteristics such as job security can be estimated through analysis of corresponding wage differentials.
The hedonic pricing method is an example of revealed preference evaluation.
Impact
The difference between the outcomes for participants, taking into account what would’ve happened anyway, the contribution of others and the length of time the outcomes last.
Impact map
A table that captures how an activity makes a difference: that is, how it uses its resources to provide activities that then lead to particular outcomes for different stakeholders
Income
An organisation’s financial income from sales donations contracts or grants
Indicator
Indicators are measures that provide information on how much of an outcome is expected to happen or has happened. They can be based on information provided by those experiencing the outcome or from other sources.
Inputs
The contributions made by each stakeholder that are necessary for the activity to happen
Materiality
Information is material if it’s amission has the potential to affect the readers’ or stakeholders’ decisions
Monetise
To assign financial value to something
Net present value
The value in today’s currency of money that is expected in the future minus the investment required to generate the activity
Net social return ratio
Present value of the impact divided by the total investment
Outcome
The changes resulting from an activity. The main types of change from the perspective of stakeholders are unintended, (unexpected) and intended (expected) positive and negative change.
Outputs
The direct and tangible products or services that result from activity.
Outcome indicator
Well-defined measure of an outcome
Payback period
Time in months or years for the value of the impact to exceeded the investment
Proxy
And approximation value were an exact measure is impossible to obtain
Revealed preference
Revealed preference is a method of evaluation which uses real life choices made by the stakeholders to value non-market goods. The two most commonly used revealed preferences methods are hedonic pricing and travel cost.
Scope
The activities, timescale, boundaries and types of SROI analysis
Sensitivity analysis
Process by which the sensitivity of an SROI model to changes in different variables is assessed
Social social return ratio
Total present value of the impact divided by total investment
Social value
Social value is the value that stakeholder experience through change in their lives. Some, but not all of this value is captured in market processes.
Stakeholders
People, organisations or entities that experience change, whether positive or negative, as a result of the activity that is being analysed
Stated preference
Stated preference valuations used questionnaires to all stakeholders directly how much they would be willing to pay to have or avoid an outcome. Questions asked to stay holders can be along the lines of “ how much would you pay for this?” Or “ would you pay £1000 for this?” Willingness To Pay (WTP) and Willingness To Accept (WTA) or two types of stated preference valuation
Subjective well-being
Subjective well-being valuations use large statistical data sets (such as the British household panel survey) to assess the relationship between life circumstances (e.g. employment status, health status, levels of volunteering, safety of local area) and levels of self reporting well-being. This relationship allows for the monetary value of changes in well-being to be calculated. For example, the increase in well-being associated with an improvement in confidence may be equal to that of a £5000 increase in income. Therefore, an improvement and confidence would have an approximate value of £5000 to an individual.
This technique has the advantage of being cost-effective and can be used to estimate the value of anything for which we have large sets of data.
Travel cost
The travel cost method uses visiting habit data to estimate the value that people place on a site (most commonly sites used for recreation such as parks or woodlands). The number of trips made by visitors at different travel costs can be used to estimate willingness to pay for access the site. The travel cost method is an example of revealed preference valuation.
Valuation
Outcomes can be more or less important to the stakeholders that experience them. Valuation is a process that assesses relative importance. financial measures are used as a proxy for value and allow for comparisons to be made between different changes. Sometimes these proxies will relate to actual amounts of money, but this is not necessary.
Willingness to pay
Willingness to pay valuations used questionnaires to determine the maximum that a stakeholder is willing to pay for something, for example, and increase in health or provision of a library service.
Willingness to pay is a form of stated preference valuation
Willingness to accept
Willingness to accept valuations use questionnaires to determine the amount of money a stakeholder would need to be paid to accept a negative outcome, for example, an increase in air pollution or traffic congestion. Willingness to accept is a form of stated preference valuation.
