Understanding What Social Return On Investment Means

A SocialBox.biz blog post update by Alex (5th May 2017)

 

Social Return On Investment (SROI), a new term borne from Return On Investment (ROI) but this time adding a social component, is structuring a new business view on how to measure monetary and communal success as it relates to the public reception of products and services provided. All nonprofits are data collectors and work hard to make sense of their success as an organization. Instead of just looking at the plain ROI, they are turning their attention to a metric that factors in their social impact.

According to the New Economics Foundation, SROI “captures social value by translating outcomes into financial values.”

 

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Source:  The homeless hub

 

Similar to ROI, SROI shows a bottom double line that looks at both the financial impact and the social impact of services rendered. In simpler terms, SROI helps you discover the cost of what would happen to the world if your nonprofit did not even exist.

Best of all, you can turn this information into talking points, sharing with the world what you do specifically to make it a better place.

Here at SocialBox.Biz, we believe heavily in the power of SROI for bettering communities and lives across the world.

 

Our community initiatives boost your firms SROI and CSR at the same time, participate today:

https://www.socialbox.biz/donate-your-office-laptops-boost-the-local-community-and-your-csr/

One response to “Understanding What Social Return On Investment Means”

  1. london_er_bob says:

    I wanted to share some frequently asked questions i came across on how Social Return On Investment adds value to firms to help with this fantastic blog post and your work;

    SROI will help you understand, manage and communicate the social value that your work creates in a clear and consistent way with customers, beneficiaries and funders. It can help you manage risks and identify opportunities and raise finance. It will throw up potential improvements to services, information systems and the way you govern you businesses. All in order to increase the social value or impact of your work. Whether you are a private enterprise, a social business, an investor or commissioning services, SROI will help you account for the wider impact of your work and allow you to make more informed decisions.Because SROI is built on principles, it is very flexible. Different organisations create value in many different ways. A consistent approach to understanding and accounting for social value means that you can communicate clearly where and how you create value in a credible way. SROI can help you plan. By forecasting the value you expect to create using SROI, you may identify areas where you need to change, often in the way you collect information.Improving the information you use to report performance and being able to compare performance against forecasts will help you create more value.

    One company wanted to boost their SROI and said “we wanted to scale-up and grow, so were looking to engage in further social impact investment. We therefore commissioned an SROI report because we thought it would be useful to be able to evidence our impact to potential investors”

    Social Return on Investment is abot managing the impacts of an project, an organisation or a policy. It is based on stake-holders and puts financial values on the important impacts identified by stakeholders which do not have market values. The aim is to include the values of people that are often excluded from markets…

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