How to measure social value
There are a number of approaches to measuring social value – and one of the most effective approaches is the Social Return on Investment (SROI) framework. This approach allows us to work with stakeholders to understand what has changed in their lives and value those changes.
Based on 7 principles SROI allows us to compare the benefits we create to the relative costs of producing them. Yet, importantly it is not just about producing a number – it is perhaps best thought of as a story of change with both quantitative and qualitative evidence.
What is SROI?
SROI is not a new approach or concept. It is built on well-established evaluation approaches and on health and environmental economics. It focuses on answering five key questions:
- Who changes?
- How do they change?
- How do you know?
- How much is down to you?
- How important are the changes?
The involvement of stakeholders underpins the whole process of SROI. By asking people what has changed (or what will change) for them, we can understand the positive and negative outcomes of our work.
The main distinction of SROI to other measurement approaches is the ability to identify monetary values for our stakeholders’ outcomes. It is this monetisation that allows us to speak a common language where we can compare the benefits created to their costs of production. This means we can show how much value is created for every £1 invested - for example, for every £1 invested in a project, the social value created is £3.50.
Even though the numbers are important, SROI is not about putting a price on everything, it is about understanding the value of what we do. Outcomes such as increasing the confidence of parents or improving someone’s mental health are valuable changes - but if we cannot compare them to the costs of their production we are less able to communicate their importance, and we are restricting our ability to create even more positive changes in people’s lives.
Whether it is to help you in tendering or funding applications, attracting great people to work with you, or being able to improve the social impacts of your work, SROI can help you.