Glossary Of Terms

Question 1

Attribution

Answer 1

An assessment of how much of the outcome was caused by the contribution of other organisations or people

Question 2

Cost allocation

Answer 2

The allocation of costs or expenditure to activities related to a given program product or business

Question 3

Deadweight

Answer 3

A measure of the amount of outcome that would have happened, even if the activity had not taken place

Question 4

Discounting

Answer 4

The process by which future financial costs and benefits are recalculated to present day values

Question 5

Displacement

Answer 5

An assessment of how much of the outcome has displaced other outcomes

Question 6

Distance travelled

Answer 6

The progress that a beneficiary makes towards an outcome ( also called intermediate outcomes)

Question 7

Drop-off

Answer 7

The deterioration of an outcome overtime

Question 8

Duration

Answer 8

How long, usually in years, an outcome last after the intervention, such as the length of time participant remains in a new job

Question 9

Financial value

Answer 9

The financial surplus generated by an organisation in the course of its activities

Question 10

Financial proxy

Answer 10

A financial proxy is a monetary representation of the value of an outcome

Question 11

Financial model

Answer 11

A set of relationships between financial variables that allow the effect of changes to variables to be tested

Question 12

Hedonic pricing

Answer 12

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.

Question 13

Impact

Answer 13

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.

Question 14

Impact map

Answer 14

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

Question 15

Income

Answer 15

An organisation’s financial income from sales donations contracts or grants

Question 16

Indicator

Answer 16

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.

Question 17

Inputs

Answer 17

The contributions made by each stakeholder that are necessary for the activity to happen

Question 18

Materiality

Answer 18

Information is material if it’s amission has the potential to affect the readers’ or stakeholders’ decisions

Question 19

Monetise

Answer 19

To assign financial value to something

Question 20

Net present value

Answer 20

The value in today’s currency of money that is expected in the future minus the investment required to generate the activity

Question 21

Net social return ratio

Answer 21

Present value of the impact divided by the total investment

Question 22

Outcome

Answer 22

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.

Question 23

Outputs

Answer 23

The direct and tangible products or services that result from activity.

Question 24

Outcome indicator

Answer 24

Well-defined measure of an outcome

Question 25

Payback period

Answer 25

Time in months or years for the value of the impact to exceeded the investment

Question 26

Proxy

Answer 26

And approximation value were an exact measure is impossible to obtain

Question 27

Revealed preference

Answer 27

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.

Question 28

Scope

Answer 28

The activities, timescale, boundaries and types of SROI analysis

Question 29

Sensitivity analysis

Answer 29

Process by which the sensitivity of an SROI model to changes in different variables is assessed

Question 30

Social social return ratio

Answer 30

Total present value of the impact divided by total investment

Question 31

Social value

Answer 31

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.

Question 32

Stakeholders

Answer 32

People, organisations or entities that experience change, whether positive or negative, as a result of the activity that is being analysed

Question 33

Stated preference

Answer 33

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

Question 34

Subjective well-being

Answer 34

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.

Question 35

Travel cost

Answer 35

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.

Question 36

Valuation

Answer 36

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.

Question 37

Willingness to pay

Answer 37

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

Question 38

Willingness to accept

Answer 38

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.