SOCIAL RETURN ON INVESTMENT (SROI)

Organisations across the public, private and third sectors have to do more with less. When value for money is paramount, society should have an understanding of value for money that includes social and environmental outcomes alongside economic costs and benefits. More and more organisations are therefore adopting SROI (Social Return on Investment) to demonstrate their impact.

The New Economics Foundation and NEF Consulting were integral to the development of the SROI methodology. They have conducted more analyses than any other organisation, using the most sophisticated economic modelling techniques. We help organisations understand and articulate the value of what they do. We help them to use this information to make better decisions and produce better outcomes for their customers, clients and communities.

Valuing what matters

How do we measure the things that make life worthwhile? Giving monetary values to social and environmental outcomes allows politicians, organisations and businesses to make better decisions, and maximise the impact of their work.

Social Return on Investment captures monetary returns, but also social and environmental returns. It is these ‘profits’ that change the world for the better.


Monetisation and Social Return on Investment (SROI)

Monetisation – the placing of monetary values on outcomes – is a fundamental element of the Social Return on Investment (SROI) methodology. It is also an area where there are a wide diversity of approaches. In some ways this diversity of approaches is a good thing; the difference in scope and purpose of SROIs means that sometimes different approaches are called for. However, these different approaches to monetisation can lead to otherwise similar SROIs showing very different SROI ratios. For some people, this lack of consistency in approach is one of the main drawbacks of SROI. Read more here


Our work using the SROI methodology

In our methodology we follow the seven principles as described by Social Value UK (previously SROI Network):

1. Involve stakeholders – Inform what gets measured and how this is measured and valued in an account of social value by involving stakeholders.

2. Understand what changes – Articulate how change is created and evaluate this through evidence gathered, recognising positive and negative changes as well as those that are intended and unintended.

3. Value the things that matter – Making decisions about allocating resources between different options needs to recognise the values of stakeholders. Value refers to the relative importance of different outcomes. It is informed by stakeholders’ preferences.

4. Only include what is material – Determine what information and evidence must be included in the accounts to give a true and fair picture, such that stakeholders can draw reasonable conclusions about impact.

5. Do not over-claim – Only claim the value that activities are responsible for creating.

6. Be transparent – Demonstrate the basis on which the analysis may be considered accurate and honest, and show that it will be reported to and discussed with stakeholders.

7. Verify the result – Ensure appropriate independent assurance.

Download the full guide on the seven principles here.

For examples of our work and case studies where we have used the SROI methodology, search the website using the general search facility at the top of the page. Examples include:

SROI training

NEF Consulting offers training for groups that will enable you to conduct an SROI analysis. We can also offer a briefing on SROI for those who just want to know more about the methodology:

Other resources

Social Return on Investment. Valuing what matters
This report shows how a tool piloted in the UK by the New Economics Foundation can be used to measure the financial value of social and environmental as well as economic returns.

To discuss all matters SROI, you can join the discussion on the Linked In members-only group SROI Exchange.


Robert_Kennedy

Our gross national product… counts air pollution and cigarette advertising and the loss of our natural wonder in chaotic sprawl… It measures neither our wit nor our courage, neither our wisdom nor our learning; neither our compassion nor our devotion to our country, it measures everything, in short, except that which makes life worthwhile.”

Robert Kennedy, University of Kansas, 18 March 1968
(abridged from the full speech

Training Programme
Strategic overviews for leaders and practical training for teams.

We offer tailored online and on-site training and briefings on SROI, Theory of Change, measuring social impact, commissioning for outcomes and social value, measuring local economic impact, community economic development, the social value of research, and more.

Clients include local authorities, universities, public health services, charities, community groups, membership bodies, and responsible businesses.

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