Social Return on Investment

The London Business School and several other collaboraters have designed a primer “to introduce how to measure social outputs, outcomes and impacts, and to use of the Social Return on Investment (SROI) approach to valuing some social impacts in monetary terms.”

Creating a “standard” for all socially-focused organizations, ventures, and activities would make measuring social impact easier, more accessible, and more widely used and referenced. Of course, every organization and mission is unique, so there cannot be one single, all-encompassing measure of social impact. But we can look to standardizing a process of measuring social impact, and this is what the SROI primer attempts to do, with an end goal of asigning a monetary value to the social impact.

The primer is an excellent resource. Divided into 7 chapters, it covers a few of the essentials: why measuring social impact is important, questions that can help in getting started, key terms to know, and steps for identifying stakeholders. Then it poses the concept of SROI and moneary valuation, and briefly explains how an organization can benefit from it. One key statement from the primer is: “the SROI ratio is calculated by dividing the value of your social impact by the investment required to achieve that impact. What the ratio tells you… it gives you an indication of the value for society that’s created for every £1 invested. However, just remember that SROI is a way of thinking, and you may not be able to monetise everything… so it’s probably more important to monetise the things that are important to your organisation and also important to your stakeholders.”

Monetary valuation is certainly integral to advancing missions, organizations and actions focused on social impact, especially as more and more high-profile and high-impact organizations genuinely move towards more awareness and participation in positive social-impact. But one caution: the triple bottom line is a baalancing act. Companies that are already so highly focused on profits will find a monetary value of SROI enticing enough to use it as the singular measure of its actions. As one of the contributors said in the primer, not everything can be measured in money. While a dollar figure of SROI is a valuable deliverable, those on the receiving end need to be presented with other, sometimes more anecdotal, measures as well. We also need executives and other decision-makers to value all measurements of the bottom line with the same balancing act  that follows the triple bottom line.

Does anyone know of any companies with that hold trainings for top-level executives in the Metrics of Social Impact?

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Check out the London Business School et. al.’s SROI Primer here: http://sroi.london.edu/Measuring-Social-Impact.pdf

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