Social Return on

Investment Calculations

Social return on investment (SROI) is a method for measuring values that are not traditionally reflected in financial statements, including social, economic, and environmental factors. It's methodology uses qualitative and quantitative research and concerts an organisations efforts into a financial report.

 

In this way, an organisation can identify how effectively it is using its capital and other resources to create value for the community. While a traditional cost-benefit analysis is used to compare different investments or projects, SROI is used more to evaluate the general progress of certain developments, showing both the financial and social impact the corporation can have.

How Social Return on Investment Works

SROI is useful to organisations because it can improve program management through better planning and evaluation. It can also increase the organisation's understanding of its effect on the community and allow better communication regarding the value of the organisation's work (both internally and to external stakeholders). Philanthropists, venture capitalists, foundations, and other non-profits may use SROI to monetise their social impact, in financial terms.

Assigning a dollar value to the social impact can present problems, and various methodologies have been developed to help quantify the results. Here at Abacus, we used a well regarded methodology that converts and organise qualitative information into quantitative values.

So if you need to include a Social Return on Investment value to your shareholders or Board, Abacus can help you demonstrate your social impact in financial terms.

Download the Service Guide to Social Investment Calculations