Social Return on Investment
Description
Penny Morriss:
"Any organisation – be it a private business, a social enterprise, a charity or government initiative – engages in activities that have an impact on the world around it. In particular, enterprising third sector organisations deliver activities that are designed to bring about positive impacts for their beneficiaries in the short, medium and long term. The activities undertaken by these organisations create value, and this value can be social or environmental, as well as economic.
‘Social Return on Investment’ (SROI) is a method for measuring and communicating this broader-than-economic concept of value. Based on a range of impact measurement, evaluation and cost benefit analysis approaches, it shares many of the same principles, whilst making a comparison between the investments required by an activity and the social value it generates. SROI tells the story of how an activity creates this social, environmental and economic value, and expresses this in monetary terms, allowing a ratio of benefits to investment to be calculated. For example, a ratio of 6:1 indicates that for every £1 invested in an intervention, an equivalent to £6 of social value is returned.
For third sector organisations, SROI can be used as a tool for both proving the worth of an activity to interested parties, including funders, investors, staff, potential collaborators and beneficiaries themselves. It can also be used as a management tool to track projections, improve performance and highlight added value when tendering competitively." (http://www.scotregen.co.uk/pdf.pl?file=surf/news/Scotregen_46_web.pdf, pp. 5-7)
More Information
- Further information on the SROI Project is available at http://www.sroiproject.org.uk
- or from the Forth Sector Development website at http://www.forthsectordevelopment.org.uk.
- Information about SROI itself can be found on the SROI Network website at http://www.sroiuk.org