A guide to
Social Return
on Investment
Table of contents.
What is Social Return on Investment?
Why should I be using it? (What are the benefits)
How do I apply SROI to what I do?
Principles that underpin SROI
SROI methodology
Where can I get further help and support for SROI?
Please note, throughout this guide, reference is made to ‘activity’ or
‘activities’. These words are used throughout for consistency in content
and are intended to cover a range of organisational ‘activities’ that
would be relevant to conducting an SROI, such as projects, campaigns,
interventions, service delivery and marketing content.
What is Social Return
on Investment?
All of our actions and activities change the world around us
(i.e. a particular course of action will have consequences).
This change can either be intended or unintended. For example, if I drop a mug of hot
coffee to stop myself from burning my hand, it will lead to the following consequences:
prevention of my hand from burning (intended consequence), mug breaking on the
floor (unintended consequence) and spilling of hot coffee on the floor (unintended
These changes will also either create or destroy value. ‘Value’ means the benefit, impact
or worth that an action creates. Until recently, ‘value’ has most often been understood
to mean purely economic or monetary value, such as a marketing campaign (activity)
leading to an increase in sales of a product (outcome) and a £10,000 profit (‘value’).
However, in an increasingly purpose-driven and customer-conscious world, ‘value’
needs to consider not only the economic value, but also the social and environmental
value of our actions. This is where Social Return on Investment (SROI) comes in.
Put simply, SROI is an outcomes-based measurement framework that helps
organisations to understand and quantify the social, environmental and economic value
they are creating - or in some cases, destroying. It is about ascribing and providing a
VALUE to what matters (i.e. a particular change in customer behaviour, or change wider
health, social and environmental issues).
Ultimately, SROI will generate a key ratio of benefits:costs for an action or activity
- for example, if an activity has an SROI ratio of 3:1, it delivers £3 worth of social/
environmental value (benefits) for every £1 put in to do the activity (the cost).
A system to measure changes in ways that are relevant to people and /
or organisations that experience or contribute to it. It tells the story of
how change is being created by measuring the social, environmental and
economic outcomes, using monetary values to represent them”1.
1 Nicholls J, Lawlor E, Neitzert E, Goodspeed T. A Guide to Social Return on Investment. London: The Cabinet Office; 2012.
Social value
The quantification of the relative importance that people place on the changes
they experience in their lives2. It encompasses any change that affects a
person’s quality of life, such as health, well-being, or sense of community.
2 Social Value UK: http://www.socialvalueuk.org/what-is-social-value/
Environmental value
The quantification of the relative importance that people place on the changes or
impacts from an activity on the wider environment (can be at local, national and
international levels; built environments or natural environments, or ecosystems).
Why should I be using it?
(What are the benefits)
The benefits of measuring the economic value of actions and activities are well known.
Measurement data is used to assess whether an action or activity is achieving its aim
(is it delivering the intended economic value?) helps us to make decisions about
whether to continue, change or stop a particular activity (based on the economic value
it produces) and work to forecast the strategic importance of particular actions or
activities to the long-term sustainability of your work.
Measuring SROI delivers these same benefits, but in addition, because it encompasses
the wider social and environmental value, it provides a wider range of additional
business benefits. Undertaking an SROI will:
Help you to understand what social value is being created and how to maximise
it - understanding what social value is being created (and how) will then support
decision making to maximise this value in your work.
Clarify assumed ‘social value’ by actively quantifying and measuring it -
while some social value may be ‘assumed’ though certain activities, SROI will
comprehensively articulate and measure this social value to provide evidence of
positive social, environmental and economic change.
Provide an in-depth understanding of why an activity is ‘achieving its aim’ -
SROI is able to show what in an activity’s changes (outcomes) is critical to
achieving that aim and why it is critical to achieving that aim. It accounts for ‘less
tangible’ social and environmental influences on those outcomes. Is an increase
in product sales actually due to the clear environmental benefit it provides, linking
into consumers’ consciousness? Could this be strengthened to support sales
through showcasing the benefits to the environment further in future promotion?
Provide a competitive advantage to stand out from the crowd to customers -
SROI will provide more information to explain the wider impact of your activities
in more meaningful ways to customers and potential customers. Most customers
are unlikely to be interested in the economic return on a product (what does that
give them?). However, customers are more likely to be interested in and trust a
company that can show its impact on wider social and environmental areas (such
as decreased hospital admissions or reduction in the number of trees cut down)
compared a company that cannot, leading to increased brand loyalty.
Provide a competitive advantage to stand out from the crowd to business
customers - SROI can help to show key business purchasers (for example, Councils
or commissioners) that in working with your organisation, there are wider benefits
than simply the financial (through social and environmental benefits). This can
inform tender and contract decision making.
Provide a ‘return on investment’ perspective to investors - SROI demonstrates
social and environmental value in language that investors, senior management
and Board members understand. In today’s world, they want to know that their
investments are being used to make a tangible difference to persuade them to
continue investing in a particular activity or project. Being able to respond to this,
through SROI, in their language will make it easier to engage them in discussions
about demonstrated impact and obtain their buy-in for investment in future work.
Support improved stakeholder relationships - through involving stakeholders in
the SROI (see ‘how do I apply SROI?’), it will help to evaluate how far their needs and
expectations are being met, in order to retain their engagement and support of your
organisation and work.
SROI can support strategic direction - conducting an SROI leads to the
development of a range of indicators that are monetised. Analysing these
indicators can support understanding and forecasting of what might happen if an
organisational strategy is altered, and the evaluation of the organisational strategy
to determine if there are certain activities or priority areas that resources should be
focused on.
Enhance your reputation and position you as an innovator - while SROI has been
developed and used by the third sector for some time, it is only just taking off across
the public and private sectors. Integrating and applying SROI to your organisation’s
work will enhance your company’s reputation as an innovator, adapting to changing
business and cultural needs. This may well strengthen the level of trust between
your key customers and stakeholder groups and your organisation.
How we conduct business to meet changing needs and demands now and into the
future for long-term sustainability is essential. How we make business decisions and
present our successes need to include more than the bottom line. Integrating the shift
towards including social and environmental purpose in your work through SROI could
be central to this. It balances the need to measure and articulate the economic return
on activities, as well as evidencing and proving the wider (social and environmental)
worth of what you are doing in an increasingly competitive marketplace.
How do I apply SROI to
what I do?
To help you apply SROI to key areas of work or activities, there is a set of established
principles and an ‘outline’ methodology that have been developed specifically to aid
organisations in undertaking an SROI.
Principles that underpin SROI
A key starting point to base and develop an SROI analysis is to use the following set of
seven principles.
Key questions to ask
1. Involve
This is essential to be able
Who are the key people
to determine exactly what is
or organisations who are
the right
to be measured and ensure
contributing to the change?
that all key elements of your
Who are the key beneficiaries
activity are considered.
of change?
2. Understand
Explicitly articulate how
What do you want to change
change is created, what
(behaviours, attitudes,
what changes
you want to change (the
intended change) and what
What has changed?
has changed (all intended and
unintended changes).
3. Value the
Think through what is
What are the changes that
important to measure (rather
things that
than deciding to measure
How am I going to determine
what is easy to measure) and
the value of the changes?
then decide how to measure
How can I recognize value in
this activity?
What financial proxy can be
used to value this change?
Make sure that all relevant
What things have the potential
4. Only include
information and evidence
to affect stakeholders’
what is material
is used to inform the SROI
analysis (don’t leave out
Are those things important
something because it might be
to the intervention or activity
difficult to analyse if it would
being measured through
affect future decisions about
the activity).
5. Do not
What value can be ascribed
Are you really able to value an
to your activity (and what
outcome directly due to the
cannot) - do not make
interventions or activities you
uncalculated assumptions.
have undertaken?
6. Be transparent
Demonstrate the evidence
Can you show any credible
and method used to reach
evidence and data to back up
the analysis to show that it is
your claims?
accurate and honest.
Are you able to show that the
decisions taken through the
SROI were reasonable?
7. Verify the
Make sure that the SROI
Were decisions taken through
analysis is credible, especially
the analysis justified?
where subjective elements
have necessarily been
undertaken, through applying
an appropriate independent
verification of the analysis.
SROI methodology
The following outline methodology is a useful tool to frame and steer an SROI analysis3.
It is worth noting that this methodology is intended to be flexible and adaptable across
all types of activities, projects and scopes of work, and can therefore be strengthened
further through applying an interdisciplinary approach combining a range of evaluation,
project management and behaviour change tools and theories. This is where Social
Change UK have been able to apply our extensive skills, experience and expertise to
enhance SROI further.
Before starting an SROI, it should be noted that there are 2 types, dependent on when
in the activity lifecycle you are seeking to provide an SROI analysis.
These are:
1. Forecast
2. Evaluative
an SROI started before and
an SROI conducted after
continuing during the activities (in
the activities have finished
real time) to predict how much
(retrospectively) and use outcomes
social value will be generated if
that have already been achieved
intended outcomes are achieved;
to evaluate how much social value
they have generated.
3 Nicholls J, Lawlor E, Neitzert E, Goodspeed T. A Guide to Social Return on Investment. London: The Cabinet Office; 2012.
Stage 1:
Establish the scope of your SROI and
identify the key stakeholders
To set up the SROI framework, it is essential to establish an understanding of the activity
or intervention you are going to measure (is it a specific campaign? Is it the launch of a
new service to customers?).
Next, determine the exact scope of what the SROI will analyse. It can be helpful to
think of the time period, geographical range, exact activities and key stakeholders and
customers who are to be included, and to also explicitly consider and decide what is
outside of the scope and will not be considered. This will help to manage expectations
and the development of the SROI analysis in later stages.
Identify the stakeholders (both individuals and groups) that have been involved in
carrying out, affecting or directly influencing the activities or interventions that will
be measured. Once all of the key stakeholders have been identified, decide which to
include and involve in the SROI. Deciding which stakeholders to include will depend on
how much they will influence the activity and its outcomes, or the impact (benefit) the
activity is expected to have on them. As a rule, only stakeholders who have high levels
of influence on the activity and / or who will have the greatest levels of impact from the
activity should be included.
We have applied a number of key project management tools to strengthen and support
this stage to maximise the SROI work. Please see ‘where I can get further support and
help’ for more information on how we can help.
Stage 2:
Mapping outcomes
With the key stakeholders, develop a theory of change (also known as a logic model) to
map out the intended and desired changes you expect or you expected would happen
through the activities.
To develop the SROI theory of change, the following will need to be considered:
Identify the inputs (time, money, staff and volunteer resource etc.) that will
make the desired ‘outputs’ (activities) and subsequent ‘outcomes’ (desired
changes) happen;
Assign a financial value to these inputs;
Determine the outputs (the summary of the activities and what they will
achieve); and
Describe the outcomes (the changes that resulted from the activity outputs).
We have developed and expanded on key areas through applying our expertise and
experience in behaviour change to help map out the processes, stages and actions that
are intended to lead to behaviour change to help ascertain the relative importance, and
therefore value, of inputs at this stage. Please see ‘where I can get further support and
help’ for more information on how we can help.
Stage 3:
Valuing and evidencing outcomes
Once the outcomes to be measured through the SROI have been described and
defined in the previous stage, it is necessary to develop a set of indicators to enable
measurement of each outcome.
Once an indicator (or set of indicators) has been developed for each outcome, you
will need to collect data from a range of sources to obtain an initial or baseline
measurement of the outcome and then continue to monitor and measure the outcome
throughout the activity lifecycle. It is important to consider if there are any open data
sources that can be used, whether specific collection metrics need to be set up to
capture data or whether stakeholders can help in capturing or providing any data. It is
important to remember to ‘measure what matters’ (not just what is easy to measure).
Following this, forecast how long each of the intended outcomes from your activities
will last (i.e. its duration). It is important to remember that an outcome is likely to
continue once an activity has stopped. This is an important step to help work out the
degree of attribution (the assessment of how much of the outcome was caused by
the contribution of other external factors to the activity in question, such as other
organisations). As a general rule, the longer the ‘outcome’ lasts after the activity, the less
likely that the outcome can be attributed to the activity and is more likely to be affected
by other factors.
Finally, each outcome needs to be assigned a financial or monetary value. At this point,
it is often necessary to estimate and make valid assumptions based on clear logical
reasoning for assigning a particular value to an outcome, as by the nature of measuring
social and environmental outcomes, many are unlikely to have a direct financial
attribution. In these instances, a financial proxy should be used. Examples include cost
savings to the health sector or increases in income for stakeholders or beneficiaries.
Financial proxy
An approximate value in monetary terms when definite financial values are not
possible to obtain.
We can help you determine the financial proxy or the value of your activities.
Please see ‘where I can get further support and help’ for more information on how
we can help.
Stage 4:
Establishing impact
Next, it is essential to work through and determine:
Which outcomes (and changes) cannot be directly attributed to your activity.
That is, that what would have happened anyway (deadweight) and what would have
happened as a result of other factors (attribution); and
Which outcomes (and changes) can be directly attributed to your activity. That is,
what would NOT have happened anyway and what would NOT have happened as a
result of other factors.
This will isolate the focus onto outcomes and changes directly attributable to your
activity to then support the calculation of the wider impact of these outcomes and their
monetary value in the next stage.
Stage 5:
Calculate the SROI
This stage, as the name suggests, is focused on calculating the overall SROI of the
activity. This is done by adding up all the benefits (financial values of the outcomes)
from the activity, minus any negatives (attribution and deadweight) and dividing by the
total inputs required for the activity (the investment in the activity).
This stage requires in-depth calculations to generate an accurate SROI ratio. Please see
‘where I can get further support and help’ for more information on how we can help.
Stage 6:
Reporting, using and embedding SROI
Once you have calculated the SROI, it is important to report on and share the findings
and recommendations with stakeholders. To ensure key stakeholders and audience
groups are engaged with the findings from the SROI, you need to communicate
the results in a meaningful way. Reporting should tell the story of change that has
happened through the activities, focusing on what social value is being, and has been
There is a balance to provide enough information to inform and assure stakeholders
about the accuracy and robustness of the work (to explain the assumptions and
decisions underpinning the values and calculations), to include all relevant information
about the outcomes of the activity to support and inform strategic planning for the
future and to ensure that the report is succinct and relevant enough to engage and
maintain interest from key audience groups.
The report also needs to put forward a set of key recommendations to influence and
strengthen the SROI in future work, integrate the activity into ‘business as usual’ and to
embed good outcome processes within your organisation.
Narrative, storytelling, report writing and generating recommendations from data are
key skills in this stage, - these are key skillsets and areas of expertise where we can
provide further support. Please see where I can get further support and help’ for more
information on how we can help.
Where can I get further help
and support for SROI?
SROI is a specific type of evaluation that combines the objective and subjective,
qualitative and quantitative and in-depth and wide-ranging analysis. It requires a
diverse skillset; including stakeholder engagement, mapping outcomes, assigning and
instigating key metrics, forecasting, assigning evidence-based and valid financial proxies
and calculating the SROI ratio, as well as reporting the finding in an emerging and
meaningful way.
Depending on the exact scope of the activities, the available data to measure outcomes
and the involvement of stakeholders, conducting a robust SROI can be time, resource
and skill intensive.
This is where we can help. Our staff have extensive experience and expertise in
conducting a SROI. Our approach also embeds behavioural theories and uses tried and
tested behavioural models which we apply and integrate into each stage of conducting
an SROI analysis.
Social Change UK offers:
Consultation services to support the delivery of a SROI analysis - from
light-touch support to guide or advise on specific stages or processes,
through to in-depth commissions to deliver full SROIs (from set up through to
final report and integration) based on organisational needs and requirements
Expertise to embed behavioural theory and models - We have built in
behavioural change models and theories into our SROI process to measure
changes and outcomes that are often difficult to measure and may be
considered or assumed ‘unquantifiable’
An extensive toolkit that combines the principles and approach to SROI
with relevant project management and evaluation tools embedded - this
will support, simplify and guide SROI analyses.
At Social Change UK, our team are here to
help you understand the social value you are
creating. We exist to help you build belief in
brands and deliver purpose through your work
and efforts to create a better world.
Why not get in touch to discuss how we can
support you with SROI work and integrating
SROI into your strategy.
You can get in touch with our expert SROI
team by email: hello@social-change.co.uk
or by calling them direct:
Lincoln: 01522 77 50 60
London: 020 7186 1980
The Gridiron Building,
First floor,
1 Pancras Square,
29-31 Mint Street,
Phone: 020 7186 1980
Phone: 01522 77 50 60