SROI: showing the value of your organisation
SROI is of interest to charitable organisations because it can help to show funders, in a very tangible way, why the organisation should be supported.
The SROI Network describes Social Return On Investment as "a framework based on social generally accepted accounting principles (SGAAP) that can be used to help manage and understand the social, economic and environmental outcomes created by your activity or organisation".
In their document 'A Guide to Social Return On Investment', SROI Network goes on to explain that:
"Every day our actions and activities create and destroy value; they change the world around us. Although the value we create goes far beyond what can be captured in financial terms, this is, for the most part, the only type of value that is measured and accounted for. As a result, things that can be bought and sold take on a greater significance and many important things get left out. Decisions made like this may not be as good as they could be as they are based on incomplete information about full impacts.
Social Return on Investment (SROI) is a framework for measuring and accounting for this much broader concept of value; it seeks to reduce inequality and environmental degradation and improve wellbeing by incorporating social, environmental and economic costs and benefits.
SROI measures change in ways that are relevant to the people or organisations that experience or contribute to it. It tells the story of how change is being created by measuring social, environmental and economic outcomes and uses monetary values to represent them. This enables a ratio of benefits to costs to be calculated. For example, a ratio of 3:1 indicates that an investment of £1 delivers £3 of social value."
Putting SROI into practice...
Below is an excerpt from the work being done by Pawel Abrarmik on assessing HHEAG's Social Return On Investment:
