Social Entrepreneurship

Social Return

on Investment

– an introduction

SROI – an introduction

in association with

1 Introduction

SROI – an introduction

Social Return on Investment (SROI) is an innovative way to measure and account for

the value you create with your work. The methodology is relatively new to the UK,

but it is attracting considerable interest from third sector organisations, government,

funders, investors and commissioners because of its ability to tell a compelling story

of change. As well as helping organisations account for their achievements and attract

funding, SROI can also help organisations maximise their social impact and improve

the lives of the people they work with.

This short paper gives an overview of SROI. A more detailed guide for people wishing

to implement an SROI has also been produced as part of a programme on measuring

social value being funded from 2008-11 by the Office of the Third Sector. The Scottish

Government is also funding a parallel programme focused on SROI. For more

information on the guide and these programmes see Sources of support, on page 10.

Social Return on Investment an introduction

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SROI – an introduction

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Social Return on Investment an introduction

2 About SROI

There are two types of SROI. Evaluative SROIs are conducted retrospectively and are

based on outcomes that have already taken place. Forecast SROIs predict how much

social value will be created if the activities meet their intended outcomes. Forecast

SROIs are useful at the planning stage of a project, or if you have not been collecting

the right kinds of outcomes data to enable you to undertake an evaluative SROI.

SROI was developed from social accounting and cost benefit analysis, and has a lot

in common with other outcomes approaches. However, SROI is distinct from other

approaches in that it places a monetary value on outcomes, so that they can be added

up and compared with the investment made. This results in a...