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SROI Analysis of 27 Socially Integrative Companies in Lower Austria

Investments to integrate disadvantaged people in the labour market are paying off

WU's Competence Center for Nonprofit Organisations and Social Entrepreneurship has determined the social and economic benefits for 27 socially integrative companies in Lower Austria by means of a Social Return on Investment (SROI) analysis. The analysis showed that each euro invested in socially integrative companies generates an equivalent value of 2.10 euros. It is the integrated persons who benefit most, but also the clients and customers of the companies.

A total of 27 Lower Austrian companies that integrate people who experience disadvantage at the labour market into their company were examined by the NPO Competence Center using an SROI analysis. The study period was the year 2014.

The SROI analysis attempts to evaluate the added value created by social organisations or projects as comprehensively as possible. SROI measures the benefit of the (essential) stakeholders, evaluates it in monetary terms and compares it with the investments. In the presence of the client, the QUASI (Quality Management for Socially Integrative Enterprises) working group, a detailed presentation of the results was given by the three study authors Olivia Rauscher, Christian Schober and Verena Burger at WU in February 2016.

Impact of socially integrative companies on stakeholders

The study shows the wide range of tasks and activities performed by socially integrative companies and identifies positive and negative effects of the services provided. Specifically, the effects of socially integrative companies on the various stakeholders are analysed. As such, the following groups have been identified: key employees, target group (consisting of people employed on an hourly basis, people in work training and transit workers), apprentices, retired employees, other people (including clients of Neustart, persons of the production school and trainees), volunteers, other social institutions, suppliers, suppliers of goods, clients, future employers, Lower Austrian Labour Market Service, Social Ministry Service, Province of Lower Austria, federal government, municipalities, social insurance institutions and the general population.

Per invested Euro, effects in the equivalent of 2.10 Euro are generated

On the basis of the surveys and calculations carried out, overall monetised effects for the year 2014 amount to around 81 million euros. This contrasts with extrapolated investments of around EUR 39 million, which consist primarily of subsidies from the Lower Austria labour market service (AMS Niederösterreich) and sales revenues from socially integrative companies. "If the total profit is related to the total investments in the socially integrative companies, this results in an SROI value of 2.10€. This means that each euro invested in the socially integrative companies in 2014 creates effects in the monetarised equivalent of 2.10 euros," says Olivia Rauscher.

Target group and clients or customers benefit most

The greatest profit is made for people in the target group, which are seen as the central stakeholder group of socially inclusive enterprises. Through employment they acquire labour market-specific skills and abilities that are essential for integration in the primary labour market. In addition, employment structures everyday life and enables new opportunities for interaction and communication. In addition to the increase in social contacts, people in the target group benefit in particular from the individual support provided by key employees. Responding to personal needs and deficits, as well as encouragement and support from the key workers, are seen by the individuals as a great relief.

The second largest profit is generated for the client or customer. This group includes companies as well as private and socially oriented clients and customers. Through the socially integrative companies, they benefit primarily from a better price-performance ratio, as well as good support and individual products. Especially private clients and customers, but also some companies benefit from the support of a socially integrative company in the course of their purchase. Municipalities and suppliers of the socially integrative companies have the lowest profit. The general population has to bear a direct loss in terms of displacement mechanisms. What is meant here is that by placing people from the socially inclusive enterprises in the primary labour market, other workers are displaced from the primary labour market. In sum, the socially integrative enterprises analysed in Lower Austria are very effective. Their monetarised effects, related to the year 2014, were more than twice as high as the financial investments made. "The study shows in an exemplary manner that investments in labour market policy measures such as the socially integrative companies have a high social benefit", says study leader Olivia Rauscher from the NPO&SE Competence Center.

Mag.rer.soc.oec. Olivia Rauscher

Olivia Rauscher

Senior Researcher
Responsibilities: Social Impact Measurements focusing on SROI analysis, evaluation, social inequality, poverty reduction, health promotion and prevention
Mag.Dr.rer.soc.oec. Christian Grünhaus

Christian Grünhaus

Academic Director, Senior Researcher (prev. Schober)
Responsibilities: Work and research focus: Evaluation, SROI analyzes, financing, donation behavior, job satisfaction and motivation, care for the elderly, care for the disabled and accessibility