ASSESSMENT OF THE IMPACT OF CSR IMPLEMENTATION AS SOCIAL

INVESTMENT USING SOCIAL RETURN ON INVESTMENT (SROI) METHOD

“MM UNAIR'S WEBINAR STUDY CASE”

“ONE STOP ENTREUPREUNEURSHIP”

By:
RANDRIANANTENAINA SOLOHERY MAMPIONONA AIME
(041924353041)

MASTER OF MANAGEMENT DEPARTMENT

FACULTY OF ECONOMY AND BUSINESS
AIRLANGGA UNIVERSITY
SURABAYA
2021
 ASSESSMENT OF THE IMPACT OF CSR IMPLEMENTATION AS SOCIAL
INVESTMENT USING SOCIAL RETURN ON INVESTMENT (SROI) METHOD
MM UNAIR'S WEBINAR STUDY CASE

I. INTRODUCTION
I.1. Overview
The activities of the business world are aimed at seeking profit (profit) as the main
responsibility of entrepreneurs towards investors (shareholders), this is as stated by et al.
(2018). However, in line with the mandate of the prevailing laws and regulations in Indonesia
which regulate the business activities of a limited liability company as a form of legal entity
of business activities, a limited liability company is required to carry out corporate social
responsibility or what is often referred to as corporate social responsibility (CSR).
Apart from being an obligation, some companies view CSR implementation as a
necessity, namely as a concrete manifestation of the attention given by the company to its
stakeholders, especially to build and maintain good relations between the company and the
community around the company.
As a social activity, CSR activities are carried out based on the value of the profits
obtained by the company. As an investment, CSR activities carried out by companies must
also be calculated and of course expected to bring benefits to the company. Thus, the funds
issued by the company to carry out CSR activities are no longer considered non-refundable
expenses for the company, moreover it is considered an act of waste, because every rupiah
value issued by the company as a social investment in CSR activities can be calculated as a
form of profit. for the company both financially and in the form of social value.
One method that can be used to calculate the return value of social investment made
by a company is to use the Social Return on Investment (SROI) method, which is a method
that will help companies to be able to calculate the return value from social investment that
the company receives in order to support the realization of sustainable development because
by using the SROI method, each program will be measured its effectiveness by referring to
the impact generated after the program runs (Santoso et al., 2018).
MM UNAIR realizes that the growth and success of MSMEs is hampered by internal
and external problems related to production and management, marketing, human resource
management, disruption of technological developments, capital and the dynamic business
climate. The occurrence of the Covid-19 pandemic has a very significant impact on the
sustainability of MSMEs. Supply and demand, as well as the supply chain, were disrupted, so
that the economy at the MSME level stagnated. In connection with the problems faced by the
MSME sector, and referring to government programs, in particular the Ministry of
Cooperatives and SMEs, as well as the Ministry of Finance to make MSMEs a priority sector
to become a milestone for national economic awakening after the Covid-19 pandemic, Master
of Management, The Faculty of Economics and Business, Universitas Airlangga aims to raise
the theme of MSMEs as one of the annual Corporate Social Responsibility (CSR) activities
carried out by the Master of Management Study Program, Faculty of Economics and
Business, Airlangga University. The discussion of this theme is expected to be able to
provide ideas about strategic efforts to help increase the capacity and capability of MSMEs
and provide information about government support to help the sustainability of MSMEs.
As a continuation of this activity, it is necessary to have a report using SROI to see
the impact of activities on MSMEs and the surrounding environment in the future. Impact
measurement itself has five functions, namely estimating the impact that will be generated,
planning measurement metrics and data collection methods, monitoring and analyzing
impacts to suit the main mission, and final post-activity evaluation. The fifth function that
will be felt the most is as a tool to report the impact that social entrepreneurship has carried
out. Referring to this, the inability to report the impact on MM UNAIR students proved to be
fatal causing various problems in its implementation. Failure to obtain funding is just one of
them, not including complaints from stakeholders (stakeholder: UMKM as learning partners)
regarding the impacts received that are not as expected. By conducting this SROI analysis
study, it is hoped that later it will be able to show external parties the advantages of MM
UNAIR in terms of credibility, capability and sustainability, the importance of this CSR
activity and its impact on MSMEs in the future. In addition, for the internal organization
itself, it can be a tool for proof and improvement.

I.2. Problem formulation

a. What is the appropriate indicators for measuring the social impact of CSR?
b. How is the ratio of social returns to investment generated by CSR as a portfolio of
performance benchmarks in obtaining external funding in the future?
c. What is the recommendation required to improve the performance of the CSR
organizing committee by integrating the perspectives of all stakeholders in order to
achieve maximum impact?
 I.3. Research purposes
Based on the problem formulation above, it can be determined that the objectives of this
study are as follows:
a. Determine appropriate indicators for measuring the social impact of CSR.
b. Calculating the ratio of social returns to investment generated by CSR as a portfolio
of performance benchmarks in obtaining external funding in the future.
c. Provide recommendations for improving the performance of the CSR organizing
committee by integrating the perspectives of all stakeholders in order to achieve
maximum impact.
 II. LITERATURE REVIEW
CSR definition, its importance and Social return on investment
Corporate social responsibility (CSR) is defined as the overall contribution of the
business world to sustainable development by considering the economic, social and
environmental impacts of its business activities. The implementation of CSR is a response
from the business world when it sees environmental and social aspects as an opportunity to
increase competitiveness and as part of risk management towards the sustainability of its
business activities. Through the implementation of CSR, it is hoped that the company will
gain social legitimacy and maximize its financial strength in the long term. The survival of
the company also depends on the company's relationship with the community and the
environment in which the company operates. This is in line with the legitimacy theory which
states that companies have contracts with the public to carry out their activities based on the
values of justice, and how companies respond to various interest groups to legitimize
company actions (Santoso et al. 2018).
There is a vast interest and a growing need for a management tool able to measure the
welfare effects of CSR activities and to guide companies towards socially positive
investments. To this end, different organizations and academic institutions developed several
social impact evaluation methods that are currently used by enterprises and the public sector
for social value measurement. A list of the main social impact assessment tools includes:
Social Enterprise Balanced Scorecard (BSC); Third sector performance dashboard; Ongoing
assessment of social impact (OASIS); Social Return Assessment (SRA); Social Accounting
and Auditing (SAA); Social Impact Measurement for Local Economies (SIMPLE); Benefit–
Cost ratio; Social Return on Investment (SROI); Social e-valuator; Basic Efficiency Resource
analysis (BER); Best Available Charitable Option Ratio (BACO); Cost per impact; Expected
Return. See also. Among them, SROI represents one of the most established social impact
assessment methods, being an indicator that satisfies the main essential requirements of social
impact evaluations, namely: (i) The ability to measure outcomes rather than tracking output;
(ii) The ability to compare the value of different types of benefits; (iii) The consideration of
counterfactual evidence in impact creation; (iv) The ability to guide towards effective and
coherent funding decisions (Lombardo et al. 2019).
In recent years, the use of SROI has been extending over new fields, e.g., health and
social care, humanitarian initiatives, cultural activities and museums, rural development,
environmental sustainability and sport activity. The latter is increasingly considered a way to
promote values such as solidarity, respect, team spirit, cooperation and fair play (Lombardo
et al. 2019). In this study, we employed SROI methodology to evaluate the effects of a CSR
activity on its stakeholders.

Characteristics of Social Entrepreneurship

The main characteristic of social entrepreneurship is having achieved social goals. As Mair
and Noboa (2006, p. 121) argue, social entrepreneurship “involves innovative approaches to
address issues in the domains of education, environment, fair trade, health and human rights
and is widely regarded as an important building block of the sustainable development of
countries.” However, social entrepreneurship arises as the contested concept (Orlando, 2018).
To recognize a business entity in Indonesia as a social entrepreneur, (BCG, 2015) identifies 4
criteria to define and distinguish it from donation-based non-profit organizations and / or
profit-oriented business entities. These criteria, namely:
a. State Social Impact as the Main Goal
Its vision and mission identifies solving social problems as its main goal. The information
they communicate to the public consistently shows a commitment to social impact. Where the
social problem in question is broad, not limited to populations who are below the poverty line
or those who are disadvantaged.
b. Using a Business Model That Fit the Purpose
Its business model is devoted to underserved groups or the base of pyramid (BOP) in an
ecosystem. The resulting financial performance maintains operations in order to continue.
c. Balancing Profit and Social Impact Targets
Even though the business model is designed to generate returns (returns), the main objective
is not to maximize profits. The social entrepreneur sets performance targets to be achieved
but also tracks the social metrics. This is not the traditional practice of donation-based non-
profit organizations or for-profit businesses.
d. Reinvesting Profits into Operations
When a social entrepreneur makes a profit, it maximizes its social impact by reinvesting the
majority of these funds into its business model. No other non-profit or business does this
(Silalahi et al, 2018).

Impact concept
Vanclay, 2003 argues that from a social point of view, an easy and appropriate way to
conceptualize social impact is as a change in one or more of the following:
  The way people live: that is, how they live, work, play and interact with each other on
a daily basis;
 Their culture: that is, their shared beliefs, customs, values and language or dialect;
 Their community: cohesion (cohesion), stability, character, availability of services
and facilities;
 Their political system: regarding the extent to which people can participate in the
decisions that affect their destiny, the degree of democratization that is taking place,
and the resources provided for this purpose;
 Their environment: the quality of the air and water people breathe and use; the
availability and quality of the food they eat; the level of danger or risk, dust and noise
they face; adequate sanitation, personal security, and access and control over the use
of natural resources;
 Their health and well-being: complete physical, mental, social and spiritual health and
not just the absence of illness or weakness;
 Their personal rights and property rights: especially whether people are affected
economically, or suffer personal harm which may include violations of their civil
liberties;
 Their fears and aspirations: their perceptions of their safety, their fears for the future
of their society, and their aspirations for the future of themselves and their children
and grandchildren.
Social investment:
There is a change in the way of thinking of the social investment paradigm. (1) First,
from "wasting money" to developing resources. At the practical level in the field, most
companies still view community development and empowerment efforts through corporate
social responsibility programs as a cost center, so that in its implementation it is important to
issue them when the community starts to become a threat to the company in running its
business. Companies that view it as a “firefighting” effort also do not view it as a productive
activity, so that the funds spent on various programs with the community are considered to be
gone. Meanwhile, as a social investment, every resource used needs to be accounted for. (2)
Second, from just good faith to care for the community, it becomes an effort to improve the
welfare of the community and also for companies because social investment also emphasizes
the benefits that will be obtained by investors - namely companies - not only for the benefits
of the beneficiaries, namely the community (Kappen and Mitchell, 2018).
 III. RESEARCH METHOD
III.1. Research design based on SROI principles
This research was conducted with reference to the SROI measurement methods, principles,
and guidelines initiated by The SROI Network UK. The type of SROI used is forecast SROI
because the available data is insufficient to carry out a retrospective study. In carrying out an
SROI analysis study, every impact researcher must stick to these 7 principles, namely (Social
Ventures Australia Consulting, 2012):
a. Involve stakeholders: Stakeholders must be informed about what is being measured,
and how it is measured and valued (given a value).
b. Understand what changes: Understand how a change is created and evaluate this
through the evidence gathered, identify positive and negative changes that occurred as
well as those that were unexpected and planned.
c. Value the things that matter: Value only those things that are meaningful or important
to each stakeholder.
d. Only include what is material: Determine which information and evidence should be
included in the process to provide a true and fair picture, so that stakeholders can
draw the best plausible conclusions about the impact it creates.
e. Do not over claim: Organizations can only claim the value they create, not because of
other unplanned activities but instead provide added value.
f. Be transparent: Proves the rationale for thinking about how the analysis can be
considered accurate, demonstrates that the analysis will be reported and discussed
with stakeholders.
g. Verify the result: Guarantee a suitable self-verification process.

III.2. Research flow

There are 6 phases of the SROI analysis study method in the guidelines issued by SROI
Network UK. This is necessary so that research is more focused, systematic and makes it
easier to analyse problems. These phases are: (a) establishing scope and identifying key
stakeholders; (b) mapping outcomes; (c) evidencing outcomes and giving them a value (d)
establishing impact; (e) calculating the sroi; (f) reporting, using and embedding

III.3. Data collection

The data was collected primarily through semi-structured interviews using funnel techniques
and spreading semi-open questionnaires. In addition, it will be supported by literature studies
on the impact of several CSR research reports such as the case in upreneur AIESEC UNDIP,
CSR of PT. Bukit Asam.

III.4. Data processing

The data is then grouped and tabulated. For data that has a fixed and clear rupiah
quantification value, it is inputted directly as a financial value; However, for some
components that are still under estimation, either due to lack of recording or because the
calculated objects cannot be assessed with certainty (such as the value of benefits from
increased knowledge, change in mindset, and benefits in the form of services), calculations
are carried out in accordance with the existing program context. The estimated value should
be attempted to be as close as possible and reasonable, by providing assumptions on similar
matters or using the size and price standard prevailing in the community in accordance with
the context of the program. Furthermore, the data is analyzed to obtain a calculation of the
impact value and obtain the present value. Then proceed with the calculation of the SROI
ratio value. The data obtained is then processed until the SROI calculation is as follows:
PRESENT VALUE OF IMPACT
SROI RATIO=
VALUE OF INPUT
 IV. RESULTS AND DISCUSSIONS

Tabel 1 Stakeholder identification

stakeholder Reason
Committee Yes The main beneficiaries; project designer and
implementer
Webinar participant Yes The main beneficiaries; designing and
implementing MSME empowerment
Webinar speaker Yes receive benefits such as credit points for the
company he is based on
Sponsorship Yes received an insignificant impact, namely
company publications
Government Yes Does not have a significant and relevant impact,
but data is needed regarding the current
conditions of empowering MSMEs to develop
indicators
Lecturer and Airlangga Yes Does not have a significant impact, but is required
University to be in charge of the event and as a facilitator
Publication media No has no impact on activities but is needed to
publish the event
Publication media reader No Obtained a significant impact, but cannot be
consulted at this time due to limited resources so
that it becomes a recommendation to be
developed for the next SROI evaluation.

Table 2 Monetation Techniques, Proxy Value, and Outcome Duration

Indicator Duration monetization Proxy Proxy
(year) techniques value (Rp)
Self-Appreciation  3  Travel Cost The cost of 400.000 
attending self-
development classes
Self-understanding  1  Travel Cost  The cost of 200.000 
attending self-
development classes 
Leadership Ability  1  Transfer The cost of 2.500.000 
Benefit:  attending a
Function leadership and
empowering skills
course 
Volunteerism (altruism)  3  Transfer Cost saving from 1.200.000 
Benefit:  volunteering
Unit Cost activities
Ability to speak 1  Travel Cost Cost of Indonesian 7.000.000 
Indonesian  Language Tutoring
  with Native
Speakers for 6
Months
Tolerance of differences 5  Transfer The cost of 26.000.000 
Appreciation of one's 5  Benefit:  attending a certified
own culture  Unit Cost intercultural
Appreciation of foreign 5  program
cultures 
Insight into world 1 
conditions 
Persistence and 2  Travel Cost  The cost of 400.000 
creativity  attending self-
development classes 
Ability to think 1  Travel Cost  The cost of 800.000
strategically and attending self-
thoroughly  development classes 
Project management 1  Travel Cost  Self-development 800.000 
skills  class fees 
Business-related skills  2  Contingent The cost of 1.400.000 
Valuation: attending a  
Willingness to workshop on
Pay entrepreneurship
training
Empowerment of 2  Hedonic The cost of 5.000.000 
MSMEs  Pricing attending a
workshop about 
entrepreneurial
training for UMKM
Table 3 Calculation of the Implementing Committee Impact
Outcome indicato Duratio Proxy Quantity  Deadweight  Attribution  Drop Total Impact
r n Value(Rp)  off  Value (IDR)
(years) 
Self-Appreciation  3  400.000 19 0% 40% 0% 4.560.000
Self-understanding  1  200.000 19 0% 40% 100% 6.080.000
Leadership and Communication Skills  1  2.500.000 19 0% 15% 100% 87.875.000
Ability to speak Indonesian  1  7.000.000 19 0% 40% 100% 212.800.000
Cross-Cultural Competence 5  26.000.000 19 0% 36% 0% 316.160.000
Persistence and Creativity  2  400.000 19 0% 10% 50% 10.640.000
Comprehensive and Strategic Thinking Ability  1  800.000 19 0% 20% 100% 27.360.000
Project Management Skills  1  700.000 19 0% 20% 100% 23.940.000
Business-Related Skills  2  1.400.000 19 0% 35% 0% 17.290.000

Table 4 calculation of participant impact

Outcome indicator Duration Proxy Value Quantity Deadweight Attribution Drop Total Impact
(years) (Rp) off Value (IDR)
Self-Appreciation  3  400.000 100 50% 50% 0% 40.000.000
Self-understanding  1  200.000 100 50% 50% 100% 40.000.000
Leadership and Communication Skills  1  2.500.000 100 0% 40% 100% 400.000.000
Engagement in Volunteerism and Community  3  1.200.000 100 10% 0% 35% 174.000.000
Cross-Cultural Competence 5  26.000.000 100 10% 40% 0% 1.820.000.000
Persistence and Creativity  2  400.000 100 40% 50% 50% 56.000.000
Comprehensive and Strategic Thinking Ability  1  800.000 100 40% 50% 100% 152.000.000
Project Management Skills  1  700.000 100 50% 45% 100% 143.500.000
Business-Related Skills  2  1.400.000 100 30% 45% 0% 119.000.000
Table 5 Calculation of speaker impact
Outcome indicator Duration Proxy Value Quantity Deadweight Attribution Drop Total Impact
(years) (Rp) off Value (IDR)
Self-Appreciation  3  400.000 9 100% 100% 0% 3.600.000
Self-understanding  1  200.000 9 100% 100% 0% 1.800.000
Leadership and Communication Skills  1  2.500.000 9 100% 50% 0% 33.750.000
Engagement in Volunteerism and Community  3  1.200.000 9 50% 50% 50% 16.200.000
Cross-Cultural Competence 5  26.000.000 9 50% 50% 50% 351.000.000
Persistence and Creativity  2  400.000 9 50% 50% 50% 5.400.000
Comprehensive and Strategic Thinking Ability  1  800.000 9 100% 50% 0% 10.800.000
Project Management Skills  1  700.000 9 100% 50% 0% 9.450.000
Business-Related Skills  2  1.400.000 9 50% 50% 0% 12.600.000
Empowerment of MSMEs  2 5.000.000 9 0% 50% 0% 22.500.000

Table 6 Calculation of total impact

  Committee  participants Speaker   Accumulation 
Total  IDR706.705.000 IDR2.944.500.000 IDR467.100.000 IDR4.118.305.000 

Table 7 Projected Value of Impact in the Next 5 Years (Discount rate 3,75%)
Stakeholders Total Impact Value 
       
Year 0  Year 1  Year 2  Year 3  Year 4  Year 5 
Committee  IDR706.705.000 IDR681.161.446 IDR632.810.749 IDR566.643.005 IDR489.054.332 IDR406.833.384
participants IDR2.944.500.000 IDR2.838.072.289 IDR2.636.618.181 IDR2.360.928.998 IDR2.037.654.298 IDR1.695.079.134
Speaker  IDR467.100.000 IDR450.216.867 IDR418.259.247 IDR374.525.364 IDR323.242.765 IDR268.898.442
Total  IDR4.118.305.000 IDR3.969.450.602 IDR3.687.688.178 IDR3.302.097.367 IDR2.849.951.395 IDR2.370.810.961

Tabel 8 Net Present Value

Stakeholder Present Value per Year; 3,75% Discount Rate Total Present Value (P
s     V)

Year 0  Year 1  Year 2  Year 3  Year 4  Year 5 

Committee  IDR706.705.000 IDR678.861.446 IDR630.510.749 IDR564.343.005 IDR486.754.332 IDR404.533.384 IDR3.471.707.916
participants IDR2.944.500.000 IDR2.838.072.289 IDR2.636.618.181 IDR2.360.928.998 IDR2.037.654.298 IDR1.695.079.134 IDR14.512.852.900
Speaker  IDR467.100.000 IDR443.216.867 IDR411.259.247 IDR367.525.364 IDR316.242.765 IDR261.898.442 IDR2.267.242.686
Total  IDR4.118.305.000 IDR3.960.150.602 IDR3.678.388.178 IDR3.292.797.367 IDR2.840.651.395 IDR2.361.510.961 IDR20.251.803.502
Total input=2.300.000+7.000.000= 9.300.000
Calculation of the Return on Investment Ratio
20.251.803 .502
Ratio of SROI= = IDR2177,61328
9.300 .000

Ratio of SROI= IDR2177,61:1

Based on the calculation of the SROI ratio, it is known that for every IDR 1 invested in the
one-stop entrepreneurship project will generate a social return on investment of IDR 2177,61.
This ratio is classified as vjery high or very promising in the world of impact investing.
Furthermore, the ratio for each stakeholder based on the contribution that has been given is
presented in table 9 below:

Table 9 Ratio Comparison between Stakeholders

Stakeholder Total PV Total Input Rasio
Committee IDR3.471.707.916 IDR2.300.000 1509,43 : 1
participants IDR14.512.852.900 IDR0 -
Speaker IDR2.267.242.686 IDR7.000.000 323,89 : 1

Payback Periode Calculation

input value 9.300 .000
Payback periode= = =20,5 hours
annual PV /8760 3.960 .150.602/ 8760
Based on the payback period calculation above, it is known that the payback period is quite
short. Where these results indicate that for an investment of IDR 9,300,000 it will take only
20.5 hours or approximately 1 day before a value equivalent to that investment is realized.
Furthermore, the payback period for each stakeholder is as follows:

Table 10 Payback Period Comparison between Stakeholders

Stakeholder Total PV Total Input Payback period
Committee IDR678.861.446 IDR2.300.000 1,23 Hours
participants IDR2.838.072.289 IDR0  -
Speaker IDR443.216.867 Rp 7.000.000 5,76 Hours
 V. CONCLUSION
Based on the background as well as the results and discussion described above, the following
conclusions can be drawn:
1. An appropriate indicator to measure the impact of this activity should be in line with
MM UNAIR's goals, namely creating and increasing Knowledge, Business skills, and
Attitude. Indicators for activity output are divided into 3 dimensions, namely physical
reach, virtual reach, and activity frequency. Meanwhile, indicators for the outcome of
change are divided into 9 dimensions, namely self-confidence, leadership,
volunteerism, Indonesian language skills, cross-cultural competences, problem-
solving abilities, business skills, business follow-up and empowerment of MSMEs.
2. The social return on investment ratio (SROI) generated in the Onestop
entrepreneurship activity is IDR 2177.61: 1, which means that for every 1 Rupiah
contributed, it will generate an impact in social value up to 2177 times. This ratio is
considered very high and very promising for potential investors to invest their shares.
The recipients of the largest ratio are Participants (∞), then Committee with a ratio of
1509.43: 1, and Speakers with a ratio of 323.89: 1.
3. MM UNAIR students as the committee of this event should be able to improve their
performance by improving all aspects of the indicators discussed above in order to get
a maximum impact.
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