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WHAT IS SOCIAL RETURN ON INVESTMENT?

Social Return on Investment (SROI) is an approach to measuring and understanding the financial impact of a social services organization. While SROI is built on the logic of cost/benefit analysis, it is different in that it measures the comparable value of organizations whose results cannot be easily measured in money. SROI provides information about actual and long-term results of services, and the qualitative, quantitative, and financial information on which to base decisions about the delivery of social services by organizations.

 

SROI analysis has been developing since the 1960’s. The SROI process has become more fully developed and internationally accepted during the last decade, primarily based on multi-year studies conducted by The SROI Network, Social Value International, The New Economics Foundation, New Philanthropy Capital, the National Council on Voluntary Organization, and the Government of Scotland.

 

A SROI analysis can fulfil a range of purposes. It can be used as a tool for strategic planning, as a basis for funding and investment decisions, as a basis for communicating impact and financial results to stakeholders, and as a methodology for comparative evaluation of an organization's long-term effectiveness

While not the only basis for funding and investment decisions, the SROI results provide the most accurate and comprehensible answer to three of the important questions asked by funding decision makers:

  • What are the direct economic impacts from these services?

  • What are the long-term consequential financial benefits we achieve?

  • What is the measurable "bang for the buck" from our funding?

The History of SROI and the Development of An Internationally Standardized Valuation Methodology

SROI has existed as a conceptual research area for over 60 years.

The First True Comprehensive Measurement Process;
• The Government of Scotland –                                                1990’s

Development of a Standardized Methodology:
• The establishment of the SROI Network
• Release of the initial SROI Methodologypaper                             2001
• Release of the first SROI Methodology Framework draft                2004
• Release of finalized SROI Methodology Framework                      2005
• Measuring Value – 2ndEdition Published                                   2008
• Updated SROI Methodology Framework                                     2012
• Consolidation of the SROI Network and Social Industry                 2014
  Analysts Association into Social Value International
• Updated SROI Methodology Framework                                     2017
• Updated SROI Methodology Framework                                     2022

Currently the SROI International economic impact/social return on investment model is the internationally accepted and accredited standard in over 30 countries including the U.K., Canada, France, Japan, Australia, Italy, Sweden, South Africa, and many others.

For more details, including sample reports, Social Economic Impact Methodologies & Principles, and our company brochure, please visit the More Information page.

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