SROI Calculator

Social return on investment expresses the value created by a project as a ratio to the money put in. The calculation sums annual social, environmental, and economic benefits, multiplies by project duration, and divides by total investment, producing a figure read as dollars of value per dollar invested; a result of 3.7 to 1 means the project generated 3.70 dollars of measured value for every dollar spent. Subtracting the investment from total benefits before dividing gives net SROI. What makes the ratio credible is not the arithmetic but the monetization behind each term. Social outcomes are valued with financial proxies drawn from revealed preference, stated willingness to pay, avoided public cost, or gains in earnings, while environmental outcomes typically use a carbon price for avoided emissions and avoided treatment costs for air and water quality. Rigorous practice then makes deductions this simplified form omits: deadweight, the share of the outcome that would have happened anyway, often estimated at 20 to 50 percent for employment programmes; attribution to other actors; displacement of benefit from elsewhere; and drop-off, the decay of an outcome in later years. Published ratios commonly fall between 2 to 1 and 8 to 1, and figures far above that usually signal missing deductions rather than exceptional performance. Results are not comparable across studies unless the proxies and assumptions match.

SROI was developed in San Francisco by the Roberts Enterprise Development Fund, a venture philanthropy fund working with social enterprises that employed people facing barriers to work. From the mid-1990s the fund, with Jed Emerson closely associated with the work, adapted conventional cost-benefit analysis to express employment and welfare outcomes in monetary terms so that grant makers could compare social investments the way financiers compare commercial ones. Emerson's blended value proposition, articulated around 2000, argued that social, environmental, and financial returns are inseparable parts of a single value creation, and it became the framing idea behind the method. The approach was taken up and reworked in the United Kingdom, principally by the New Economics Foundation, and the UK Cabinet Office funded a national programme that produced A Guide to Social Return on Investment in 2009, with a revised edition in 2012. That guide set out the seven principles, among them involving stakeholders, not over-claiming, and being transparent about assumptions. The SROI Network, founded in 2008, later became Social Value International and now maintains the standards and an assurance process. The Public Services (Social Value) Act 2012 required English commissioners to consider social value in procurement, pushing the method into mainstream public contracting.