SOCIAL RETURN ON INVESTMENT

Frameworks & Approaches

 

Frameworks & Approaches describe popular ways to gather and make sense of data.

SOCIAL RETURN ON INVESTMENT

Social return on investment (SROI) is a model used to quantify the social and financial benefits and value of a service, programme, policy or organisation to society.

The international SROI Network explains SROI this way:

“Most public, private and third sector organisations have a pretty good idea of the costs of what they do. Annual accounts, management accounts, budget reports and a whole accountancy profession add up to a great deal of effort to make sure this is the case.

Some organisations are quite good at counting what they do with these resources. They can track the number of users or contacts, or customers. Many can provide some evidence that these activities lead to some sort of change. But very few can explain clearly why all this matters. What would happen if they did not exist? What is the real value of what they do?

Social Return on Investment sets out to redress the balance by looking at value not just cost.”

Measure your impact with Social Return on Investment

HOW IT WORKS

SROI usually uses a six-stage process:

  • Establish, sound out and identify interested and affected parties.
  • Plan results.
  • Find evidence for, and evaluate results.
  • Gauge effects.
  • Calculate SROI.
  • Interpret of results and report.

The heart of SROI is to show what we would miss financially had the project not gone ahead.

SROI takes significant time and resources to do properly, but it’s increasingly popular with funders and service providers.

VIDEO RESOURCE

Advantages:

  • Provides evidence of value for money.
  • Combines the results of other evaluative tools and approaches like outcomes mapping, programme logic, results-based accountability, etc. to find the value of the services.

Disadvantages & Limitations

  • Takes a lot of work to find the financial value of each benefit.
  • The whole organisation needs to support it and it takes a long time to develop so it won’t be quick and easy.
  • There is a degree of subjectivity as SROI analysts have to apply their own discretion when they measure and evaluate the effects.
  • Putting a financial value on conditions that don’t have a monetary value can be controversial and highly subjective.

USEFUL RESOURCES

  • Social Value Aotearoa was recently established in Aotearoa New Zealand and is linked to the international SROI network.
  • This blog post includes a helpful list of the best ways to use SROI.
  • 7 Deadly Sins of measuring social outcomes video presentation from the CEO of the international SROI Network.
  • This short video discusses how the Ministry for Primary Industries used SROI with Māori farming businesses to find the best way to balance investment in development processes.
  • Here’s a good guide to starting out with SROI.
  • This is the international SROI network with a wide range of SROI resources and guidance.
  • Applying SROI thinking to wider societal challenges – video of Jason Saul, CEO of Mission Measurement: Measuring Social Impact: Challenges and Opportunities: “Why solving social problems (not just doing good) matters and why nonprofits need a social value proposition. Insights for changing the way we think (and talk) about charitable “work”. We need to stop “working at” issues and decide how we, as a society, will change some condition or help at-risk, low-income, vulnerable populations. Jason Saul is clear that there is a value or worth that has nothing to do with cost. View this, share it, and talk about it.”
  • Yale professor Dean Karlan presenting the case for SROI and calculating the true value of an intervention.