Charity Support, Advice, Impact Measurement, Philanthropy Impact – NPC

Should we do a SROI?

By Sarah Keen 27 April 2012

It’s a question that the measurement and evaluation team here at NPC gets asked a lot. Like any impact measurement, Social Return on Investment (SROI) is an investment in itself—it takes time and a mix of skills to do one properly. In the current funding environment, many charities want to know whether that investment will pay off.

Perhaps unfairly, SROI is often regarded as an approach to impact measurement that is much more about proving value to funders than improving value for beneficiaries. Of course, this may have something to do with the headline grabber that sums up a SROI—usually expressed as ‘For every pound spent, charity X creates Y pounds of social value’.

These ratios are a neat summary but having a number to stick in your marketing materials should not be the only benefit from doing a SROI. In principle, SROI is all about stakeholder perspective and value. You involve your stakeholders in most stages of the SROI process, from deciding what to measure to deciding how to value what you measure.

So why not check with your stakeholders about whether you should do one?

  • Check with your organisation whether it has the data and skills to do a SROI, or at least the capacity to develop these necessary ingredients. Thinking about this at the beginning will make it much lower cost for your organisation.
  • Check with your funders about what they think about assigning financial values to outcomes. This should help inform whether it worth going that final, technical, and sometimes controversial step.
  • And last but not least, check with your beneficiaries about whether SROI would be interesting and relevant to them. At the end of the day the results should reflect the change that they experience as a result of what you do.

If you are still not sure, then it may be worth taking a look at just the first few stages of SROI. Not actually unique to SROI, these stages can help you to develop a logic model for your intervention based on stakeholder perspectives. (If you want to go a step further, then you may want to read about theory of change.) Regardless of whether you then go the whole hog, they should be valuable in understanding what difference you make.