Social Return on Investment (SROI) is a framework for measuring and accounting for the social, economic, and environmental value created by activities beyond traditional financial measures. SROI involves identifying stakeholders, mapping outcomes, evidencing outcomes through indicators, establishing impact, and calculating a ratio of benefits to costs to understand the social value created. SROI can help organizations improve services, demonstrate social value, and make the case for further funding and sustainable operations.

1. Social Return on Investment
Natalie Lynch

2. Why SROI?
• Increasing recognition that we need better
ways to account for the social, economic and
environmental value that results from our
activities.
• Investors in activities want VfM and this
includes the social value has been created.

3. Treasury VfM Definition
“VfM is defined as the optimum
combination of whole-of-life costs and
quality (or fitness of purpose) of the
good or service to meet the user’s
requirement. VfM is not the choice of
goods or services based on the lowest
cost bid.”
HM Treasury (2006) Value for money guidance

4. What is SROI
‘SROI is the application of a set of principles
within a framework that is designed to help
bring about consistency, whilst at the same time
recognising that what is of value will be very
different for different people in different
situations and cultures’
new economics foundation

5. What is SROI?
• Every day our actions and activities create and
destroy value.
• The value we create goes beyond what can be
captured in financial terms.
• SROI is a framework for measuring and
accounting for a broader concept of value.
• SROI measures change in ways that are
relevant to the people or organisations that
experience or contribute to it.

6. What does SROI do?
• Tells the story of how change is being created
by measuring social, environmental and
economic outcomes and uses monetary values
to represent them.
• A ratio of benefits to costs is calculated
• A ratio of 3:1 indicates that an investment of £1
delivers £3 of social value.

7. Types of SROI
• Evaluative, which is conducted retrospectively
and based on actual outcomes that have
already taken place.
• Forecast, which predicts how much social
value will be created if the activities meet
their intended outcomes.

8. Measuring Change
(Distance Travelled)

9. Developing a theory of change
Inputs Activities Outputs Outcomes
Output: Tells you an activity has taken place and is
usually quantitative (e.g. Number of people trained).
Outcome: The change that occurs as a result of an
activity (improved wellbeing of training participants).

10. Context to the Intervention
These are the wider economic, social, environmental, and policy conditions. This is very important – many logic models
suggest that interventions take place in a vacuum, failing to take account of the way these factors have an influence.
Rationale for Intervention
This is the justification for the selected intervention, e.g.: what is the nature and scale of the specific problem being
addressed? What will happen if we ‘do nothing’? Why this intervention and not alternatives?
Inputs Activities & Outputs Short-term Medium-term Long-term
These are the These are the things Outcomes Outcomes Impacts
resources available to that an intervention It is often useful to Medium-term This is the final, high-
deliver the does, e.g. provide distinguish between outcomes are level effect of the
intervention. workshops, practical short- and medium- changes in behaviour intervention – e.g.
support, training etc. term outcomes. or condition – e.g. ‘Improved life
This may be in terms
‘beneficiaries expectancy, reduced
of specific cash Outputs are Short-term outcomes
increase levels of health inequalities’.
funding or ‘in-kind’ quantitative can be defined as
physical activity’
contributions. measures of this changes in knowledge This relates closely to
activity, e.g. No.s of: / awareness / attitude In describing any the original rationale
It is relatively outcomes, language
straightforward to put • Beneficiaries – e.g. ‘beneficiaries for intervention.
•Materials distributed have an increased suggesting change
a monetary value on (‘increased, reduced’) Impacts are subject to
inputs and, in a • Sessions held awareness of ...’
a very wide range of
is useful.
framework of costs Evaluation at this This is based on a other contextual
simple model of Evaluation here is
and benefits, inputs level concerns influences (e.g.
behavioral about effectiveness.
are the costs. implementation and combinations of other
change, which The relationship
Evaluation at this efficiency (the policies, programmes,
suggests that these between inputs and
level is about relationships between economic
changes precede outcomes is the basis
economy and the inputs and outputs). conditions), - shown
changes in behaviour for cost-effectiveness
resources consumed. by the very
or condition. / cost-benefit studies.
permeable line

11. Example
Stakeholder Input Activity Output Outcome
Participants Time Trained in computer Number of hrs Increased self
recycling engaged confidence
Level of IT skills Sustainable
employment
Participants Time Encourage family Number of hours Better family life
families member family member is Increased income
engaged for family
Local N/A N/A No of computers Reduced landfill
government recycled and diverted expenditure
from landfill
The N/A N/A Carbon dioxide Contribution
environment emissions towards climate
change
State N/A N/A Reduction ins health Less usage of NHS
services used care
Less expenditure
on benefits

12. Evidencing outcomes
• SROI evaluates material outcomes for all
stakeholders and not just outputs or those
outcomes that are easy to measure.
• Find out what is important, then seek to
measure it (this involves engaging
stakeholders).
Key question: “how do we know that change
has taken place?”

13. Evidencing outcomes
• Select ‘ways of knowing’ that an outcome (a
change) has taken place = indicators
Stakeholder Outcomes Indicators
Long term unemployed Person (A) finds (A) Accepts a job offer
person sustainable and (A) Stays in
meaningful employment for at
employment least 6 months
(A) Self reports on job
satisfaction

14. Evidencing Outcomes
• Objective indicators e.g. No. occurrences of staff
sick leave
• Subjective indicators e.g. Self reporting physical
health
• Direct measurement e.g. Cost saving

15. The stages of SROI
1. Establishing scope and identifying key
stakeholders
2. Mapping outcomes (shows relationships
between inputs, outputs and outcomes)
3. Evidencing outcomes and giving them a value
4. Establishing impact
5. Calculating the SROI
6. Reporting, using and embedding

16. SROI can help improve services by:
• Facilitating strategic discussions and helping you understand
and maximise the social value an activity creates
• Helping you target appropriate resources
• Demonstrating the importance of working people and
organisations that have a contribution to make in creating
change
• Creating a formal dialogue with stakeholders that enables
them to hold the service to account and involves them
meaningfully in service design.
• Identifying common ground between what organisation wants
to achieve and what stakeholders want to achieve

17. SROI can improve sustainability by:
• raising our profile;
• improving our case for further funding;
• making our tenders more persuasive.

18. Questions for Settlement?
• Forecast or evaluative SROI?
• How are we doing gathering output, outcomes,
and impact data?
• In house or external support for SROI?
• If in house who would be involved?
• Are their sufficient resources for in house SROI?
• Skills needed for SROI: accounts, finance,
evaluation & stakeholder involvement