Social return on investment

Abstract

Social return on investment (SROI) is a method that enables the measurement of social outputs and the valuation of social outcomes in monetary terms. Entities considered include for-profit and not-for-profit organizations. The technique originated in social enterprises in the 1990s. Rather than considering a return solely in the perspective of the entity itself, SROI considers the perspective of stakeholders, who commonly provide the investments for these activities. The SROI methodology includes four elements: inputs, outputs, outcomes, and impacts. Given the complexity of SROI analysis, standards to determine these financial proxies are currently being established by the SROI network. This method has experienced a surge in popularity in the second half of the 2000s. While benefits include creating an economic logic to support social policies and improving the clarity of communication about goals, limitations include being too focused on monetization and losing information about benefits that cannot be monetized. – AI-generated abstract.