Part of Solution
Social Return on Investment (SROI) (from pp. 16 of measuring the “impact” in impact investing, linked in resources)
According to the SROI Network, SROI is “a framework based on social generally accepted accounting principles (SGAAP) that can be used to help manage and understand the social, economic and environmental outcomes.”5 SROI was developed from social accounting and cost benefit analysis. SROI puts a monetary value on social benefits, and compares public and private benefits to costs.
In its simplest form, the SROI ratio can be calculated by: SROI ratio = (Present Value of Impact) / (Value of Inputs)
It can take the form of a %ROI, a ratio, or a Net Present Value (NPV) number.
There are two types of SROI. The first is evaluative, which is conducted retrospectively and based on actual outcomes that have already taken place. The second is forecast, which predicts how much social value will be created if the activities meet their intended outcomes.
This is especially useful in the planning stages of an activity, or if existing data does not enable you to compute an evaluative SROI