News
SROI Exchange 30 May
The SROI Exchange being hosted by UK and European SROI Networks on the 30th May in Manchster is now fully booked. See the UK Country page for more information.
Perth YMCA SROI Report and The Wise Group (Cadder Environmental Improvement Project) Now Available in Scotland SROI Country Pages
New Reports from Northern Ireland posted in Case Studies
The methodology
The methodology for calculating social return on investment as defined in this document was pioneered by the Roberts Enterprise Development Fund (REDF), a San Francisco-based philanthropic fund that invests in organisations working for social benefit. Since then the approach has been developed to take into account developments in corporate sustainability reporting as well as ways developed in the field of accounting for social and environmental impact. Interest has been fuelled by the increasing recognition of the importance of metrics to manage impacts that are not included in traditional profit and loss accounts, and the need for these metrics to focus on outcomes over outputs. While SROI builds upon the logic of cost-benefit analysis, it is different in that it is explicitly designed to inform the practical decision-making of enterprise managers and investors focused on optimizing their social and environmental impacts. By contrast, cost-benefit analysis is a technique rooted in social science that is most often used by funders outside an organisation to determine whether their investment or grant is economically efficient.
Much more than a single number, SROI analysis is a way of reporting on value creation. It bases its understanding of value on the views of stakeholders, finds indicators of what has changed and tells the story of this change and, where possible, uses monetary values for these indicators It is an emerging discipline: a skillset for the measurement and communication of non-financial value. Therefore, we distinguish between a numerical calculation of the social return on a financial investment and SROI Analysis. The latter implies: a) a specific process by which the number was calculated, b) context information to enable accurate interpretation of the number itself, and c) additional non-monetized social value and information about the number's substance and context.
SROI recognises that prices are dependent on relative income and wealth and the ability of those affected by an organisation's activity to control that impact -impacts that if not included in prices.
