Strategic decision-making in philanthropic giving and social investment requires good information about the potential and actual social benefits and impacts of that investment. But this information about social impact is hard to find and to generate. Methods for valuing social benefits are complicated, haphazard, and often unknown to most social investors and organizational leaders. This relative absence of standardized legitimized ways to document the social impact of philanthropic giving and social investments means that the complete, complex value of this work in advancing the public good is underappreciated.
One way to meet this need for more information and valuation methods is by calculating a social return on investment (SROI) measure. Borrowing the concept of a return on investment from the private sector, which measures financial performance, an SROI is designed to measure the social performance of a given program or social investment.
This report seeks to identify and describe state-‐of-‐the-‐art approaches to valuing social returns on social investments, to review the organizational challenges to implementing an SROI measurement process, and to examine in detail organizations in the Netherlands and the United States that have attempted to use SROI measurements