A Social Innovation Investment Appraisal Method and Tool

This paper describes a methodology, and its implementation in a tool, that is designed to make it easier to produce an investment appraisal and business case for projects with social outcomes and longer-term benefits external to the primary project initiator. This meets a need common to innovative public and charity sector projects which typically focus on a wide range of outcomes that extend beyond financial return on investment. It was designed specifically to support ICT-enabled innovation in social services to disadvantaged groups, but has more general applicability. The approach brings together established public sector methods for business case development, emerging concepts such as public value and social return on investment, principles of multi-criteria decision making analysis, innovative methods for commercial investment appraisal and approaches for project evaluation employing the theory of change. The method comprises a number of steps that progressively build up the analysis necessary to support a management choice between alternative solutions to a defined problem. An interactive tool, now available as a web-based application, was built alongside the development of the methodology. It was developed iteratively with field testing on UK local government projects and now offers a unique means of conducting project evaluations and appraisals in the noncommercial sectors, simplifying and standardizing the process, based on current best practice. The method represents a shift in paradigm for public sector investment appraisal, from that of a sterile drafting exercise to an interactive and engaging management decision process reflecting a comprehensive stakeholder value perspective.