Where solidarity is investment

A Guide to Social Return on Investment

Topic: Social impact measurement

Context of the Guide

The Office of the Third Sector (OTS) and the Scottish Government recognise that demonstrating added social, economic and environmental value is important for third sector organisations and their funders, investors and commissioners, and is becoming increasingly important for the public and private sectors. The OTS has therefore funded a three-year programme on measuring social value. The work began in November 2008 and is being delivered by a consortium of organisations: the SROI Network, nef (the new economics foundation), Charities Evaluation Services, the National Council for Voluntary Organisations and New Philanthropy Capital.
In addition to this programme, the Scottish Government is also supporting SROI, including the development of a database of indicators to support SROI analysis.
This guide, which builds on the work in three earlier SROI guides1, has been prepared as part of this programme. The purpose of this guide is to standardise practice, develop the methodology, and provide more clarity on the use of SROI. It has been written for people who want to measure and analyse the social, environmental and economic value being generated by their activities or by the activities they are funding or commissioning.

Contents

Foreword by Liam Byrne, Minister for the Cabinet Office and Kevin Brennan, Minister for the Third Sector

Introduction

1  What is Social Return on Investment (SROI)?

The principles of SROI

The stages in SROI

2  How Can SROI HelpYou?           

3  Who Can Use SROI?           

Types of organisation

Skills required to analyse the SROI report

Time requirement

4    Using This Guide

Symbols

Language used

The worked example

Resources available

5 Future Updates 

The Guide to SROI Analysis

 Stage 1: Establishing scope and identifying stakeholders

1.1  Establishing scope

1.2  Identifying stakeholders

1.3  Deciding how to involve stakeholders 

Stage 2: Mapping outcomes           

2.1  Starting on the Impact Map

2.2  Identifying inputs

2.3  Valuing inputs 

2.4  Clarifying outputs

2.5  Describing outcomes 

Stage 3: Evidencing outcomes and giving them a value           

          3.1  Developing outcome indicatore

          3.2  Collecting outcomes data

          3.3  Establishing how long outcomes last

          3.4  Putting a value on the outcome           

Stage 4: Establishing impact

4.1  Deadweight and displacement

4.2  Attribution

4.3  Drop-off

4.4  Calculating your impact

Stage 5: Calculating the SROI           

        5.1  Projecting into the future

5.2  Calculating the net present value

5.3  Calculating the ratio

5.4  Sensitivity analysis

5.5  Payback period 

Stage 6: Reporting, using and embedding           

6.1  Reporting to stakeholders

6.2  Using the results

6.3  Assurance

Resources           

1 Format for an SROI report           

2 Glossary

3 Note on cost allocation

4 Note on capital or loan-financed projects

5 Sources of support and further information

6 Download

7 A summary of the relationship between SROI and other approaches

8 The seven principles of SROI

9 Checklist for SROI analysis

10 The worked example