Social Return on Investment
What is SROI?
It’s a way of calculating the ratio of investment to social return for a particular project or strand of an organisation. It’s more than a cost/benefit analysis as it takes into account, and gives a financial value to, the change that happens to all the relevant stakeholders.
It is based on standard accounting and commercial investment principles as well as standard evaluation methods, and helps us explore how we make a difference and whether we could create more value.
What is it used for?
It can give us a way of reviewing and evaluating our own organisation’s activities to calculate the impact and value of our interventions. SROI can be used both as a planning tool to forecast outcomes and as an evaluation tool to assess change.
Increasingly, funding bodies are looking for evidence of the impact of their investment. SROI can give a complete picture of the inputs, outputs, outcomes and impact of funding. It’s more than a simple ratio as the story of change is an integral part of an SROI report.
Who else is interested?
The Scottish Government is very interested and has itself invested in the SROI project to develop, promote and support the use of Social Return on Investment across the third sector in Scotland. The work is being undertaken by a consortium of organisations with Forth Sector Development as the lead partner.
The Museums, Libraries and Archives Council (MLA) are also interested and commissioned a study from nef into the usefulness of SROI for the sector.
Where can I find out more?
The SROI project site has a lot of useful information including the SROI Guide, case studies and information about training.
The MLA report by nef.