Learn how to measure and improve the impact, value, and sustainability of your social programs or initiatives using the social return on investment (SROI) framework.

To anyone reading this article, I am going to rate this article not so good. I want to test and see if I rate this article not so good if it actually dissappears. I also want to see if a human actually respond to comments and contributions. In other words change the content. Lastly I want to see where my comments and contributions end up and how a computer interprets the contributed data. My apologies if you are reading these comments as you are now part of my experiment. But please if you can, give me a like so I can see if it works and if the article remains in circulation. If I get asked for my contribution I must at least get rewarded in some way for my contribution. Thank you.

Last updated on Apr 27, 2024

What do you do if your organization is not seeing a positive social return on investment?

If your organization is working to create positive social change, you probably want to know how effective your efforts are. Measuring the social return on investment (SROI) of your programs or initiatives can help you assess the impact, value, and sustainability of your work. But what if your SROI is lower than expected or shows no significant improvement over time? How can you identify and address the factors that are limiting your social impact? In this article, we will explore some steps you can take to improve your SROI and achieve your social goals.

Key takeaways from this article

Refine your theory of change:

It's crucial to ensure that your framework reflects the real-world journey from activities to impact. Regularly revisit and tweak it to better guide your efforts and measure success.
Embrace data-driven insights:

Collecting robust data helps pinpoint what's working and what's not. Use this information to steer your programs towards activities with the highest impact, creating more value for every dollar spent.

This summary is powered by AI and these experts

1 Define your theory of change

A theory of change is a framework that explains how your activities lead to the desired outcomes and impacts for your beneficiaries and stakeholders. It is essential to define your theory of change by answering four questions: what is the problem you are trying to solve and why does it matter, what are the long-term goals you want to achieve and how do they align with your mission and vision, what are the specific outcomes you expect to see as a result of your activities and how do they contribute to your goals, and what are the indicators and data sources you will use to measure your progress and impact? Having a clear and coherent theory of change can help you design, implement, and evaluate your programs or initiatives more effectively. It can also help you communicate your value proposition and impact story to your funders, partners, and beneficiaries.

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Tracy Dawson

Executive Search Partner Africa at Millar Cameron I International Development I Secretary at Businesswomen of Africa NPC I Founder Owner at Hlomo Safety Pty Ltd I Google Developer
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Reana, I must agree on the quality of the question. I'd love to contribute meaningfully in these articles - as an 'expert' with a reputation to maintain (such as it is). Kudos to those who have made a contribution, but I can't help but wonder if these are fairly randomly generated ai questions, and we're just feeding the beast. I too will be interested in seeing how long this stays up.

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Reana Rossouw - Next Generation Consultants

Philanthropy, Social Investment & Development | Impact Management & Measurement | Research, Facilitation & Training
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Hi Linkedin This is a very badly written article. There is no correlation between the heading of the article and content of the article. The question (headline) is what if there is no SROI, not how to calculate SROI. Also, social, economic and environmental return on investment can be calculated in many ways, SROI is just one of those. Maybe the question/headline should have been how to calculate the value of your program using the SROI methodology. And then another article reflecting on the question of what if there is no return. In addition, return for WHOM? I.e. ROI from a stakeholder perspective is probably the best alternative question.

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2 Collect and analyze relevant data

Data is essential for measuring and improving your SROI. To answer two key questions - how much change has occurred as a result of your activities, and how much of that change can be attributed to them - you need to collect and analyze data. This data should measure the outputs, outcomes, and impacts of your activities, such as the number of people trained, the hours of counseling provided, or the units of clean energy generated. You can use various methods and tools to collect data, such as surveys, interviews, focus groups, observations, or secondary sources. Additionally, you need to estimate the attribution and contribution of your activities to the observed change. Collecting and analyzing this data can help you quantify and validate your impact, as well as identify strengths and weaknesses in your intervention. It can also help you demonstrate accountability and transparency to those who fund you or benefit from your work.

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Reana Rossouw - Next Generation Consultants

Philanthropy, Social Investment & Development | Impact Management & Measurement | Research, Facilitation & Training
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To anyone reading this article, I am going to rate this article not so good. I want to test and see if I rate this article not so good if it actually dissappears. I also want to see if a human actually respond to comments and contributions. In other words change the content. Lastly I want to see where my comments and contributions end up and how a computer interprets the contributed data. My apologies if you are reading these comments as you are now part of my experiment. But please if you can, give me a like so I can see if it works and if the article remains in circulation. If I get asked for my contribution I must at least get rewarded in some way for my contribution. Thank you.

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3 Calculate and communicate your SROI ratio

A SROI ratio is an effective way to express the value of your impact in relation to the cost of your intervention, as it shows how much social value is created for every dollar invested. To calculate your SROI ratio, you need to identify and monetize your outcomes and impacts, calculate the net present value (NPV) by discounting the future value of your outcomes and impacts, determine the investment (direct and indirect costs associated with your activities), and divide the NPV by the investment. For example, if your NPV is $10 million and your investment is $2 million, your SROI ratio is 5:1, meaning that you create $5 of social value for every $1 you invest. This ratio can help you communicate the value and efficiency of your impact in a straightforward manner, as well as compare and benchmark your performance with other interventions or sectors.

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Reana Rossouw - Next Generation Consultants

Philanthropy, Social Investment & Development | Impact Management & Measurement | Research, Facilitation & Training
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Honestly I don't agree with the methodology. Firstly finding the right proxy to represent value (either future or present) is highly problematic. Secondly if you work with national data, but your program is only affects 100 people in a specific location, the value of such an indicator is potentially null and void because it is dependent on the context. Thirdly I have never seen a calculation, report or evidence where I agreed with the outcome or calculated return value. There is simply not enough case studies or evidence where this methodology is applied.

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4 Review and improve your strategy

A SROI analysis is not a one-time exercise, but an ongoing process which requires regular review and improvement. To ensure that you are achieving your intended outcomes and impacts, reaching your target beneficiaries and stakeholders, using resources efficiently and effectively, and addressing the needs and expectations of your funders, partners, and beneficiaries, you need to monitor and evaluate your activities, outcomes, and impacts over time. With the data and feedback collected, you can identify and implement changes or improvements that can enhance your impact and SROI. These changes may include scaling up successful activities or initiatives, innovating or adapting products or services to meet changing needs or preferences of beneficiaries or stakeholders, strengthening or expanding partnerships or collaborations with other actors or sectors, diversifying or securing sources of funding or revenue, improving data collection and analysis systems or methods, and enhancing impact reporting and storytelling skills or tools. By reviewing and improving your strategy regularly, you can increase your impact and SROI over time as well as respond to the opportunities and challenges in your context.

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Adriana Isabel García Murillo

Senior Grants and subcontract Manager USAID's Inclusive Justice Activity
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It is important to be able to review the strategy of the Social Organisation annually and assess whether we are effectively generating the expected social impact, This is to adjust the plan and generate innovative processes to impact the lives of our beneficiaries and thus generate social transformation.

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5 Learn and share your lessons

Learning and sharing your lessons is an important part of improving your SROI and achieving your social goals. You need to reflect on and document the successes and failures of your intervention, and the factors and conditions that influenced them. You need to share your insights and recommendations with your funders, partners, beneficiaries, and other stakeholders, as well as with the wider social impact community. You need to seek and provide feedback and guidance to others who are working on similar or related issues or sectors. You need to participate in and contribute to the knowledge and practice of measuring and improving SROI.

Learning and sharing your lessons can help you improve your own performance and impact, as well as support the learning and impact of others. It can also help you build trust and credibility with your funders, partners, beneficiaries, and other stakeholders, as well as showcase your leadership and expertise in the social impact field.

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Oyetola O.

Advocate| Public Affairs Director| Policy & Stakeholder Engagement leader| Business Sustainability (ESG) specialist| Passionate about life and learning
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It is important to share your lessons, and also just as crucial to learn from other ecosystem builders that are recognised for their sterling social impact - in tracking this and also in delivering tangible, sustainable social value. Intentionally building a learning community of critical stakeholders, including similar organisations, academia, social impact think tanks, funders, and beneficiaries; will make for more robust, inclusive, and impactful outcomes for all.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Reana Rossouw - Next Generation Consultants

Philanthropy, Social Investment & Development | Impact Management & Measurement | Research, Facilitation & Training
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Considering my comment above, I do think it is simple enough to calculate economic value or impact from interventions. For example: 1. If you train 100 young people over a year, and then help them to get a job, you can say it cost me R10 000 per person, but they earn R120 000 per year and you multiply that by 100 people you have some sort of economic model to indicate value. 2. If you provide a school building like a classroom you can take that cost and then attribute and calculate the cost saving to government because they did not build it, you did. 3. Or increased household income and savings can be calculated by the skills you taught women (sewing), the clothes they sold as a result (profits), and money they received (income).

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What do you do if your organization is not seeing a positive social return on investment?

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2

3

4

5

6

1 Define your theory of change

2 Collect and analyze relevant data

3 Calculate and communicate your SROI ratio

4 Review and improve your strategy

5 Learn and share your lessons

6 Here’s what else to consider

Social Impact

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What do you do if your organization is not seeing a positive social return on investment?

1

2

3

4

5

6

1 Define your theory of change

2 Collect and analyze relevant data

3 Calculate and communicate your SROI ratio

4 Review and improve your strategy

5 Learn and share your lessons

6 Here’s what else to consider

Social Impact

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