Introduction: What Is an SROI Analysis?
How Does It Relate to Other Forms of Analysis?
Why Is Impact Key?
The Social Return on Investment (SROI) measures the value added to the society caused by different interventions. Within the scope of an SROI analysis, an impact model establishes causal relationships for a specific project, programme or organisation. The impact identified in this way is measured and, where appropriate, converted into monetary units. It becomes possible to aggregate the individual impacts and correlate them in total to the input. The resulting SROI value represents the relationship between the monetised impacts and the input. An SROI value of 1:2 thus shows a social return of 2 Euros or Dollars for every one Euro or Dollar invested. The SROI approach essentially focuses on impacts, their measurement, analysis and representation. This is more meaningful than a focus on performance. It particularly applies where performance is targeted at positive societal development and is not an end in itself. The central understanding of impact in this book comprises not merely what happens, but what would not have happened without the intervention. In our understanding, a systematic analysis of the impact model including any unintended impact is fundamental for impact measurement in terms of an SROI analysis. We understand impact measurement—and SROI analysis all the more so—as an effort which does not just aim at generating key figures that are expressed as far as possible in money, but at understanding, measuring and, where reasonably possible, monetising the impact of a social investment in its causal relationships. Thus, beyond the monetary representation of effects, it generates an understanding of correlations and identifies attributable results. Impact measurement and SROI analysis intuitively make sense for non-profit organisations and the public sector, as well as for all (social purpose) organisations which focus on improving social conditions. It is also becoming increasingly important for companies that, from CSR initiatives to their core business, want to analyse their social impact. A key figure like the SROI value is attractive with a view to ongoing reporting requirements. There is no single true SROI analysis. SROI in essence means that more or less extensively monetised impacts are correlated to monetary and (to a limited extent) monetised input. We will show that in line with different design possibilities and methodological rigour, SROI analysis can range from “light” or “medium” to “advanced” and “integrated” and can be tailored in a very context-specific way. Metaphorically speaking, the glasses used for analysis can have different strengths, coloured lenses and designs. Concrete decisions when identifying, measuring and monetising the impacts specify the picture within the framework. This book provides guidance to any such choices.
Publication: SRI Analysis