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7 principles of Social Return on Investment

1 Involve stakeholders:

Involve your stakeholders to Inform what gets measured and how it is measured.

Stakeholders are people or organisations that experience change as a result of

the activity being measured, and they will be best placed to describe the change.

Stakeholders need to be identified and then involved in consultation throughout the analysis, so the value, and the way that it is measured, is informed by those affected by or who affect the activity.

2. Understand what changes:

Articulate how change is created and evaluate this through evidence gathered,

recognising positive and negative changes, as well as those changes that are intended

and unintended.

Value is created for or by different stakeholders as a result of different types of

change; changes that the stakeholders intend and do not intend, as well as changes

that are positive and negative.

How the changes are created is to be stated and supported by evidence. The changes are the outcomes of the activity, made possible by the contributions of stakeholders, and often thought of as social, economic or environmental outcomes. It is these outcomes that should be measured in order to provide evidence that the change has taken place.

3. Value the things that matter:

Use financial proxies so the value of the outcomes can be recognised.

Many outcomes are not traded in markets and as a result their value may not be recognised.

Financial proxies should be used in order to recognise the value of the outcomes

and to give a voice to those excluded from markets but who are affected by

activities. This will influence the existing balance of power between different


4. Only include what is material:

Determine what information and evidence must be included in the accounts to give

a true and fair picture, so stakeholders can draw reasonable conclusions

about impact.

Make an assessment of whether a person would make a different decision about the activity if a particular piece of information were excluded. This covers decisions about which stakeholders experience significant change, as well as the information about the outcomes. Deciding what is material requires reference to the organisation’s own policies, its peers, societal norms, and short-term financial impacts. External assurance becomes important in order to give those using the account comfort that material issues have been included.

5. Do not over-claim:

Only claim the value that organisations are responsible for creating.

This principle requires reference to trends and benchmarks to help assess the

change caused by the activity, as opposed to other factors, and to take account

of what would have happened anyway. It also requires consideration of the

contribution of other people or organisations to the reported outcomes in order to

match the contributions to the outcomes.


6. Be transparent:

Demonstrate the basis on which the analysis may be considered accurate and

honest, and show that it will be reported to and discussed with stakeholders.

Each decision relating to stakeholders, outcomes, indicators and benchmarks; the sources and methods of information collection; the difference scenarios considered and the communication of the results to stakeholders, should be explained and documented.

This will include an account of how those responsible for the activity will change the activity as a result of the analysis. The analysis will be more credible when the reasons for the decisions are transparent.

7. Verify the result:

Ensure appropriate independent assurance.

Although an SROI analysis provides the opportunity for a more complete

understanding of the value being created by an activity, it inevitably involves

subjectivity. Appropriate independent assurance is required to help stakeholders

assess whether or not the decisions made by those responsible for the analysis

were reasonable.


A Guide to Social Return on Investment, 2009

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