The 2019 mid-term evaluation had already made clear that Rikolto’s strategies are effective in driving sustainable food system transformation. Rikolto delivers significant results for producers, farmer organisations, consumers, private companies and governments alike. One question was left unanswered, however: how efficiently does Rikolto deliver its results? 5 efficiency analyses concluded that each Euro invested in Rikolto projects generates a social, economic and environmental return of 1.8-3 Euro.
The OESO-DAC criteria are the standard reference to evaluate development projects. Evaluations typically assess relevance, effectiveness, impact, sustainability and coherence. While efficiency is also addressed, its assessment rarely goes in depth. Doing a proper efficiency assessment is an art and requires time and resources that exceed the average scope of evaluations.
Development projects that seek systemic solutions generate more than just an economic impact. Rikolto expects its strategies to deliver social, environmental and health benefits on top of the economic ones. This motivated us to apply the Social Return on Investment (SROI) approach to assess the efficiency of 5 flagship interventions beyond a purely economic point of view.
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Using SROI, the evaluators mapped the expected benefits of each project. Next, stakeholders validated these benefits and contributed to assign monetary values to non-monetary benefits such as participating in a training or gaining more visibility to clients. Evaluators then calculated the total value of these benefits and divided this value by the total project costs. The resulting SROI values and analysis were presented for validation to the Rikolto team and stakeholders.
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The 5 SROI analyses concluded that Rikolto’s projects generate a positive return on investment, ranging from 1.13 to 1.80 Euro for each invested Euro. This efficiency ratio is comparable to or even exceeds that of similar interventions, when factoring in a 5-year post-project timespan of benefits, along with health and environmental benefits. Adding these additional benefits would result in a (conservatively calculated) economic and social return of 1.8-3 Euro for every Euro invested in Rikolto projects.
The infographics below present summaries of each efficiency evaluation along with comparable cases where found. The individual summaries, full evaluation reports and management responses are available for download at the bottom of this page.
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The evaluations provoked lots of interest among Rikolto staff, triggering a new way of looking at our work and making them more aware of the concrete benefits it brings. They also highlighted opportunities to expand our work in areas with a high potential return on investment or added value, such as creating more spaces to bring consumers closer to producers and increasing ownership through co-investment of partners in projects. Furthermore, this type of analysis demonstrates the value of Rikolto’s food system innovations, opening the door for social impact investors to scale these innovations.
Following an organisation-wide debriefing, many colleagues are eager to expand this type of analysis to other projects using the internal efficiency toolkit. This toolkit was developed building on the experience of the 5 assessments. A team of Rikolto efficiency champions will use it to train colleagues and guide future efficiency evaluations.
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Besides motivation to continue measuring the efficiency of Rikolto interventions, the 5 studies offered a glimpse into how to improve the organisational cost-structure and project monitoring. On the input side of our projects, it should become clearer which specific and generic costs are associated with each intervention so that they can be better factored in the calculations. Similarly, colleagues should map more concretely the results of each intervention, especially the less tangible ones related to social, environmental or health benefits. For the latter ones, Rikolto should also reach out to specialised research centers or institutions to provide proxy data, as these measurements are resource-intensive and fall beyond the project scope. These improvements should result in more readily available data for both costs and benefits associated with Rikolto’s contributions to changing the recipe of our food system.
Interested in exploring what efficiency analysis could bring to your organisation or need support implementing such an assessment? Don't hesitate to reach out to me. Our efficiency experts will be happy to assist!
Download the evaluation reports and management responses here
This article used the nominal efficiency ratios, whereas the reports use the discounted SROI value of each case (which is slightly lower). Considering that the evaluations only covered the project period, it is fair to use the nominal value as no future benefits or costs needed discounting to present-day values. In addition, all cases except for Belgium had expat directors for some part of the intervention, thereby inflating regional overhead costs. Alternative calculations were made to reflect the current organisational setup, where regional management is composed of nationals only (except for East Africa).
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