Measuring Social Return on Investment (SROI): A Practical Framework

Abstract

The evaluation of the total effectiveness of the social and community programs has taken a critical place in modern management and policymaking. One such technique is Social Return on Investment (SROI), a way of defining creation of value, to more than such heights as financial returns to social, environment and economic performance. The research design is a handy model of how to measure the SROI that is intended to guide organizations, practitioners, and policymakers to identify the effectiveness of the projects and programs. The model combines the quantitative and qualitative metrics, as well as the stakeholder participation, which is one of the most significant methods of the development of the results with utmost importance to the beneficiaries. It describes a procedure of mapping the inputs, output and the outcome which is then supplemented by some financial proxy to the non-financial benefits like an enhanced well-being, social inclusion or environmental protection. The proposed framework will assist in overcoming the most frequent issues relating to the use of SROI that are the inability to measure and transform social value and comparability between sectors. The framework has been demonstrated to be a flexible one to the different contexts using case illustrations of nonprofit, public sector and corporate social responsibility undertakings. The results prove that SROI can be helpful in the increase of the effectiveness of the decisions and resources management, though, it must be simultaneously applied carefully to prevent the complexity of the simplification of the social processes. Finally, this paper also mentions that realistic SROI model can help organizations in their quest to improve impact demonstration, in order to appeal to investment and sustainable development. The contribution is being made in continuation of the increasing need of evidence-based social value measurement, and provides a compromise of methodological rigor and practical applications.