Social return on investment tool

AgResearch staff have been inundated with interest in an evaluation tool developed to help grow Māori agribusiness.

AgResearch senior scientists Oscar Montes de Oca Munguía and Hoani Ponga began working on the Social Return on Investment evaluation tool in late December 2012.

The one-year project, funded by the Ministry of Primary Industries’ Sustainable Farming Fund, involved working closely with Aohanga Incorporation, a large Māori Incorporation with more than 1700 shareholders.

Based in the Wairarapa, Aohanga Station covers more than 7000 hectares with two marae on site, and includes pastoral grazing land, forestry, native bush (with honey production), olives and scrub land (gorse).

Aohanga Incorporation, who had an existing relationship with AgResearch, wanted a tool developed to help them evaluate the relative merits of different diversification opportunities for their land, and a decision-making model that would make the process clear to shareholders.

Social Return on Investment is an established theory and model used extensively overseas, particularly in social services and the not-for-profit sectors, to demonstrate impact which may not necessarily be financial, but may have social, cultural or environmental benefits.

The tool developed for Aohanga Incorporation is an Excel spreadsheet that brings together information on the implications of developing different land-based alternatives, based on the Social Return on Investment theory. The tool incorporated the owners’ values and priorities, the characteristics of the land and current use, to compare the potential outcomes and benefits across four criteria: economic, social, environmental and cultural.

Throughout the project the researchers met regularly with Aohanga Incorporation to present updates and work together to prioritise and plan so the tool was most relevant to the Incorporation.

The tool is an effective visual tool for decision making, enabling people to see the impact of different land-based decisions and the best paths to follow. It is especially useful for organisations with multiple shareholders, such as farm-based Māori Trusts and Incorporations. It means better governance, transparency and understanding for shareholders not involved directly in decision-making.

It also allows Māori farming incorporations and Māori agribusiness groups to meet cultural, environmental and social aspects of their people and shareholders, while looking at how to best improve productivity and performance of the farm. Financial decisions can be weighed up against the impact on the environment, and a  land-use change, such as the establishment of an orchard, can be understood in terms of its social benefits, such as job creation for youth.

Aohanga Incorporation used the tool to support integrated decision making for land-based activities along two dimensions: wellbeing (environmental, economic and social), and activities (the impact of possible land-based activities such as farming, forestry and other land uses).  They were able to compare land use options on a per hectare basis, as well as compare enterprises including sheep, cattle, forestry products or yield from beehives (honey) and olive trees (olive oil).

The project has been a huge success, and has highlighted the benefit of the effective partnership between Aohanga and the research team, and the importance of relationships for researchers and others working with Māori agribusiness.

Continuous engagement and communication is key to the success of such research partnerships, says Oscar Montes de Oca Munguía: “It’s a great example to other Māori agribusiness about engaging with research and its applications.”

The Social Return on Investment tool has garnered a lot of interest from groups and individuals who would like to use it to help make better decisions. “People from around the country are very interested, and a number of them have been in contact with us including regional councils, district health boards, tribal authorities, marae and farm consultants,” says Hoani Ponga.

The researchers are still working through the next steps of how the model can be used by other Māori agribusinesses and the diversity of other users interested in the model.

Hoani Ponga cautions that for the tool to be relevant, a significant amount of background research and work has to be done to ensure data and estimates are accurate, so that outcomes modelled are also accurate. “It does take a bit of thinking; the model is not going to do the thinking for you,” says Ponga. “It is a powerful tool at a governance level, allowing people to focus on long-term strategy and looking at trade-offs when looking at various investment decisions concerning land usage.”

The Social Return on Investment tool offers an opportunity for Māori Incorporations to find out more about their land resources, and how such a tool can help them organise information to make better decisions. It also demonstrates how researchers and Maori agribusiness can work together effectively.