What Is Social Return on Investment (SROI)?

Clients come to us for many different reasons, and from many different stages of growth. Today we want to focus on one type of organization that we often see at our consultations – the organization which has tried and struggled to quantify its social impact. We think this resonates with many industry professionals, and hope to show you how when you learn how to calculate your SROI, you can quantify your impact in tremendous ways. But first, what is SROI?

“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 well-being by incorporating social, environmental, and economic costs and benefits.” –The SROI Network

1. The Importance of Quantifying Your Impact

You know that you make a difference. You see the value your services bring to your community every day. We suspect that it’s a big part of what gets you out of bed every morning. The difference that you make inspires you to work hard, and drive growth for your organization. It’s time to help that difference inspire others too. When you quantify the impact you create with clear, data-based, metrics, you persuasively demonstrate exactly what gets you out of bed in the morning. This impact evidence attracts stakeholders, donors, grantmakers, and more.

2. Why You Might Struggle to Quantify Your Impact

You know that impact is important – but it can be hard to measure. When you’re busy actually creating value, you probably don’t have time to step back and reflect. Furthermore, impact measurement is tricky. How do you decide which metrics matter? You might have spreadsheets filled with financial and social data, but how do you analyze and compile that data to find the answers that matter? If you’re new to data analytics, it’s easy to feel stuck in the weeds quickly.

3. How SROI Can Help

Don’t worry, there’s a hero here to help you. It might not be wearing a cape, but it is a very successful algorithm that has helped thousands of companies like yours measure their impact. It’s the social return on investment (SROI) calculation.

SROI= SIV – IIA/(IIA×100)

SIV=social impact value 

IIA=initial investment amount​

By ascribing a monetary value to social impact, an organization can better communicate its value to investors. It shows where your money is going, and how much value each dollar brings. Your SROI is calculated based on three metrics: Inputs (investments into the project), outputs (outcomes of the projects), and impact (changes resulting from this project). 

4. Collaborating with Social Impact Solutions to Calculate Your SROI.

As experts in calculating SROI, the Social Impact Solutions team is ready to jump in and consult with your organization. Our expert researchers will review what projects your team has undertaken, and what their outputs and impact are. We’ll make sense of even the most opaque sheets of data to create real, quantifiable, impact metrics for your organization.

It is clear that although it can be challenging for a busy professional like you to measure your impact, there are few things more important than effectively measuring (and marketing) your impact to stakeholders, constituents, and consumers. While there are many ways to quantify your impact, one of the most dependable and successful systems is the Social Return on Investment (SROI) calculation. Our team of expert researchers and marketers are here to help you calculate your SROI, and articulate it effectively to the folks that matter.

If you’re ready to stop struggling and quantify your true impact, we’re here to help. Take the first step to success by scheduling a consultation today.

To learn more about how to measure and market your impact, be sure to read this article on how to leverage the Theory of Change at your organization.