Social Return on InvestmentMay 18, 2014
Non-profits and socially-conscious organizations require a method for measuring their social impact and the effectiveness of programs and initiatives. The Social Return on Investment (SROI) Methodology was developed to achieve this and has since become a cornerstone of worldwide social impact measurement. It values, in a composite metric, the dollar amount of social impact created per dollar of input.
SROI is an outstanding tool for (i) auditing internal processes and providing a concise snapshot of project performance, (ii) marketing to external stakeholders the tangible social return generated by each project against clear benchmarks e.g. “One dollar input created $3.56 Social impact!”. Insights from the SROI framework shed light on which initiatives an organization should prioritize to maximize social impact with the most efficient use of resources and how to best utilize the SROI metric to better communicate the benefits to society and benefactors. It best serves clients who have sound financial standing and are looking to focus on data-gathering and analysis for performance management and future growth. Target organizations include non-profits relying on government funding who may need to account for the outcomes of their projects in regular funding applications.
- Stage 1: Establishing Scope and Identifying Stakeholders
- Stage 2: Mapping Outcomes
- Stage 3: Evidencing and Valuing Outcomes
- Stage 4: Establishing Impact
- Stage 5: Calculating SROI
- Stage 6: Interpretation of Results and Reporting