Social Return on Investment

Many of the activities and impacts of the third sector cannot be captured in financial terms, therefore the Social Return on Investment (SROI) can be used as a framework for measuring and accounting for a broader concept of value, encompassing social, environmental and economic benefits. SROI can be used to measure social change by attributing monetary values to social benefits which allows for a cost-benefits ratio to be calculated.

There are two types of SROI:

  1. Evaluative: which are done retrospectively and are based on outcomes that have already materialised
  2. Forecast: which can be used to predict the social value of an activity if its intended outcomes are achieved

Carrying out an SROI can help charities demonstrate the impact of their work in a quantified manner as well as inform strategic decisions that will help a charity to maximise the value created through their activities.

This guide gives a good overview of what SROI is, why it can benefit your organisation and the stages involved in conducting your own SROI calculation.

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