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Social Return on Investment

Social Return on Investment (SROI) is a way of measuring and accounting for the value created in projects and services.

Although relatively new to the UK, the methodology is attracting considerable interest from government and from organisations that might fund of commission specific pieces of work and third sector organisations are starting to adopt it because it can help them give an account of their achievements and attract funding but also because it is a useful tool for understanding how to maximise social impact, improve performance and achieve their goals.

The table below shows the six stages of carrying out an SROI analysis



1. Establishing scope and identifying key stakeholders

Setting clear boundaries about what the  SROI analysis will cover, who will be involved in the process and how.  Stakeholders might include: service users, volunteers, partners and funders.

2. Mapping outcomes

The purpose of developing an impact map (or theory of change) is to show the relationship between inputs, outputs and outcomes.  Sometimes stakeholders might identify changes that go beyond the explicit goals of the project.  For example, a gardening/ healthy food project may also lead to greater participation in other social activities and avert loneliness.

3. Evidencing outcomes and giving them a value.

To evidence outcomes requires identifying indicators.  For example, an indicator of healthier service users might be number of GP visits.  Then there can be a financial proxy for the indicator to work out potential savings: in this case the NHS figure for the cost of a GP visit. 

4. Establishing impact.

After taking out of the analysis the aspects of change that would have happened anyway

or are a result of other factors, the quantity of each outcome is multiplied by the financial proxy to give the total value of the outcome.

5. Calculating the SROI

This stage entails adding up the benefits, taking away any negatives and comparing the result with the investment made.  For example, this might show that for a total input (spend) of £10,000, the social return is £15,000 which means that there is £1.50 value for every £1 investment.  This is the social return ratio.   To make the exercise more robust, it should be accompanied by a sensivity analysis to check estimates of impact and their financial proxies. 

6. Reporting, using and embedding.

The results of the exercise can be sent to funders and used in funding bids and reported to volunteers and service users.


The Office of the Third Sector in the Cabinet Office has produced Social Return on Investment: an introduction (2009). This gives the seven principles of SROI that underpin how it should be used:

1. Involve stakeholders

Stakeholders should inform what gets measured and how this is measured and valued.

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

Use financial proxies in order that the value of the outcomes can be recognised.

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

Organisations should only claim the value that they 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 verification of the account.

The SROI Network promotes the use and development of the Social Return on Investment methodology in the UK. It is a membership organisation and a company limited by guarantee. Its objectives are:

· To ensure the principles and standards of SROI are adhered to;
· To develop the methodology;
· To disseminate information on indicators and proxies for use in SROI analyses;
· To train SROI practitioners and provide peer support.

The SROI Network website contains a range of SROI resources including A guide to Social Return on Investment, a full description of the principles of SROI and details of SROI training courses: www.thesroinetwork.org.

The SROI Network,
(14) 7th Floor,
Gostins Building,
Hanover Street,
L1 4LN.

Tel: 0151 703 9229

Email: info@thesroinetwork.org