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Organizational leaders today, regardless of their objectives, recognize the value of utilizing a multifaceted approach to impact assessment as a powerful tool for measuring progress. While financial metrics are essential for assessing performance and stability, this approach may not serve to capture the broad impact of their efforts, especially for organizations with a social mission.
“Many organizations and businesses are interested in measuring the impact of their efforts on intangible areas like well-being, empowerment, generational poverty, and family dynamics,” said Dr. Allison Ricket, Director of Analytics, Impact Measurement and Management Group at the Voinovich School of Leadership and Public Service (GVS) . “These factors, though essential to their mission or program success, often fall outside the scope of traditional metrics.”
This is where Social Return on Investment (SROI) offers a powerful lens for measuring.
What is SROI?
SROI, a framework for measuring and communicating social impact, empowers organizations and businesses to assess their full contribution – social, environmental, and economic.
Instead of relying on conventional metrics, SROI uses data-driven research to translate these successes into a universal language: monetary value. This comprehensive approach captures both intended and unintended consequences, fostering transparency, trust, and responsible practices.
Origins and adoption
“An interesting thing about Social Return on Investment is that it was developed in the United States around housing in Silicon Valley,” explains Dr. Ricket. “ The Roberts Enterprise Development Fund wanted a better way to understand if the programs they invested in were making the changes they wanted.”
The success of SROI has sparked global adoption. Europe utilizes it for policy decisions, while countries like Australia and Singapore integrate it into business practices. The framework's popularity continues to grow, with countries like the UK even requiring SROI projections for government contracts.
The principles of SROI
To ensure a comprehensive and credible impact assessment, SROI relies on a set of core principles.
- Involve stakeholders: Ensure those affected by the initiative have a say in how its impact is measured.
- Understand what changes: Clearly define the positive and negative effects of the initiative.
- Value the things that matter: Focus on the aspects of change that stakeholders consider most important.
- Only include what is material: Establish priorities and thresholds for including impacts that are significant to stakeholders.
- Do not overclaim: Claim only those impacts that can be attributed to the activity under review. Use benchmarks, trends, and baselines to assess the extent to which the activity has had impact.\
- Be transparent: Make the measurement process and findings clear and easy to understand. Document decisions made during analysis and their rationale.
- Verify the result:Seek independent assurance, stakeholder review, or other measures of verification that are proportional to the decisions being informed by the analysis.
- Be responsive:Use the SROI to manage impact.
SROI addresses the shifting investment landscape
The implementation of SROI is in part driven by the changing investor landscape, especially the growing trend of impact investing. Younger generations prefer to invest in ventures that offer both financial returns and positive social or environmental impact.
Businesses now have a tool to measure desired social impact effectively, aligning with stakeholder expectations, particularly those of impact investors. This improves accountability and shows dedication to generating positive social returns alongside financial profits.
Engaging stakeholders for accurate measurement
To ensure a comprehensive and accurate assessment of social value, Social Return on Investment prioritizes engaging stakeholders. This ensures the measurement process accounts for the experiences and perspectives of those directly affected by an initiative.
“The most valuable part of SROI is the fact that organizations are hearing directly from their stakeholders,” said Dr. Ricket. “It is not theoretical. It is not anecdotal. It measures the change that is actually reported in the lives of the people it tries to benefit.”
This bottom-up approach enhances the inclusivity and accuracy of impact assessment, moving beyond anecdotes to data-driven insights.
OHIO’s support for mission-driven organizations
The Voinovich School has long played a vital role in supporting social enterprises, nonprofits, government agencies, and philanthropic organizations.
Evaluation services have been central to this support, offered by the school since its founding. Various teams from across the school are currently engaged in nearly 50 program evaluations, needs assessments, and strategic planning initiatives. By providing these services, the school helps to support innovation and capacity building throughout the region.
Starting in 2017, the school added SROI analysis to its suite of evaluation services. SROI empowers mission-driven organizations to clearly articulate their value and attract investment capital. SROI can also help organizations maximize their impact by determining which lines of their programming are producing the most value.
According to Kelli Coughlin Schoen, Director of Operations and Management of the Impact Measurement Group, “SROI adds a new tool to the toolkit that the school draws from as it serves organizations in the region and beyond. SROI, and social impact measurement generally, help the school to tell the story of the good work that is being done all around us, and to do so in a way that reaches new audiences in the financial sector.”
The impact measurement and management group
Extending beyond SROI, the Voinovich School has established the Impact Measurement and Management Group (IMM). This collaborative program offers a comprehensive suite of tools for assessing impact. While SROI remains a core methodology, the IMM Group provides a broader range of approaches to holistically [JW1]support programs and initiatives.
By dedicating itself to multifaceted impact assessment, the IMM group positions the Voinovich School as a leader in this field. This unique expertise allows the school to provide social enterprises and nonprofits with even more comprehensive support in demonstrating their societal value and securing resources to further their missions.
Leading the GVS Impact Measurement and Management Group (IMM) is Kelli Coughlin Schoen, Director of Operations and Management, and Dr. Ricket, the first and only individual in the United States to achieve the highest level of certification for Social Value Measurement by Social Value International, the global standard-setting body for SROI and social value measurement. The IMM group includes five dedicated professionals as well as three affiliated members from the School’s evaluation team. All 8 have gone through accredited training programs for SROI.
Benefiting from the Voinovich School’s expertise are organizations such as:
- Boys and Girls Club of Ohio
- Coalfield Development
- The Tony Wells Foundation, City of Columbus, and Franklin County
- Building Bridges to Careers
- OMEGA Development District
- Keeping it Native
- Habitat for Humanity of Ohio
- Ohio Air Quality Development Authority
- Stark County Mental Health & Addiction Recovery
- United Way of Muskingum, Perry, and Morgan Counties
Alignment with global frameworks
Social Return on Investment also bridges local initiatives with global frameworks like the United Nations Sustainable Development Goals (SDGs).
The SDGs represent a global call to action adopted by all UN member states in 2015. These 17 interconnected goals aim to address critical challenges like poverty, hunger, inequality, climate change, and environmental degradation. The SDGs encompass a broad range of social, economic, and environmental objectives, all striving for a more just, sustainable, and prosperous future for all.
By aligning local outcomes with the SDGs, organizations gain a broader perspective on their contributions to global sustainability. This facilitates collaboration and knowledge sharing on a global scale.
Unlocking social value for a sustainable future
SROI empowers businesses and organizations to unlock social value and contribute to a more equitable and sustainable future. By embracing a holistic approach to impact assessment and integrating stakeholder perspectives, organizations can drive meaningful change, one investment at a time.
Organizations seeking to redefine their impact measurement strategies and demonstrate their commitment to social responsibility are encouraged to explore the merits of SROI. Learn how the Impact Measurement and Management Group at the Voinovich School can assist in implementing this framework to assess your organization's social value and foster accountability. For more information on our services, feel free to contact Dr. Allison Ricket.