What is Social Value and What’s the Difference Between It and Social Return on Investment (SROI)?
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Keen to measure the impact of your work but aren’t sure where to begin? Want to better understand methodologies like SROI that quantify social impact? Social Value Lab, part of the CEIS group, has put together this introductory guide to measuring concepts like social value. It outlines key reasons why social impact matters.
People often say that “the clue is in the name” or, “It does exactly what it says on the tin”. To a certain extent that is the case with us here at Social Value Lab.
We support and deliver reports for clients around Social Impact measurement. Social Value Lab is a UK centre of expertise in social impact measurement. We help organisations to measure soft and intangible outcomes. We do this by providing training, mentoring, and consultancy in techniques that either we invent or adapt to client needs
So, what is the difference between social value impact evaluation and Social Return on Investment (SROI)?
Social Value
Social value is a concept that refers to the positive impacts and benefits generated by an organisation, project, or initiative in terms of societal well-being, environmental sustainability, and economic development.
It encompasses several factors that contribute to the betterment of individuals, communities, and the environment. Social value can include improved well-being, increased employment opportunities, enhanced educational outcomes, environmental sustainability, and more.
It is an holistic perspective that considers the broader social and environmental effects of an activity, program, or investment.
Social Return on Investment
Social Return on Investment (or SROI) on the other hand, is a specific methodology and framework used to quantitatively measure and account for the social value created by an organisation or project. SROI is a financial approach to understanding the impact of a program, initiative, or investment, expressed in monetary terms.
It involves a systematic process to assign a financial value to the social, environmental, and economic outcomes generated by an activity. The SROI ratio is often represented in monetary terms as a return on investment (like financial ROI), where the benefits are compared to the costs involved.
For example, an SROI analysis could quantify the value of outcomes like improved mental health, reduced pollution, or employment opportunities created. The SROI ratio represents a return on investment, comparing the monetised benefits to the costs involved.
In practice, organisations may use both social value and SROI to assess and communicate the broader impact of their work. Social value offers a comprehensive view of impact, while SROI provides a specific quantitative financial measure that can be helpful for decision-making, reporting, and attracting investment or funding.
There are two types of SROI:
- Evaluative. Evaluative SROI is conducted retrospectively, based on actual outcomes that have already taken place. For instance, an evaluative SROI for a tree planting project would measure the actual environmental and social benefits generated after the trees were planted.
- Forecast. Forecast SROI predicts the social value expected to be created if activities meet their intended outcomes. For example, a youth education program could forecast the possible SROI based on increasing school attendance.
Why Measuring and Reporting on Social Value Is Important
Measuring and reporting on social value offers benefits for both organisations and funders. These benefits extend beyond financial metrics and provide a more comprehensive understanding of an initiative’s impact on society.
Key reasons for organisations or funders to measure and report on social value include:
- Accountability and Transparency: Measuring and reporting on social value promotes accountability. It allows organisations and funders to transparently demonstrate the outcomes and impacts of their programs and investments to stakeholders, including the public, beneficiaries, and regulatory bodies.
- Improved Decision-Making: Social value measurement provides valuable data for informed decision-making. It helps organisations and funders understand which initiatives are most effective and where resources should be allocated to maximize social benefits.
- Demonstrating Impact: Reporting on social value allows organisations and funders to showcase the tangible impact of their work. It can help tell a compelling story of how their efforts positively affect individuals, communities, and the environment.
- Attracting Funding and Support: Many funders and donors are increasingly interested in supporting projects that have a clear social impact. Measuring and reporting on social value can make organisations more attractive to potential funders, as it provides evidence of the value generated by their investments.
- Continuous Improvement: Social value measurement is a tool for continuous improvement. It enables organisations and funders to identify strengths and weaknesses in their programs, leading to adjustments and enhancements that can increase effectiveness over time.
Other benefits of measuring and reporting on social value include increased stakeholder engagement, enhanced communication and public relations, and a better understanding of the long-term sustainability of projects.
It is a comprehensive approach that goes beyond financial return on investment, focusing on the broader social and environmental value created by initiatives and investments.
We have outlined here what social impact measurement and reporting is. In later articles we will outline how it can be done and what it means for contracting clients.
But There’s More!
So, Social Value Lab certainly work extensively in the social value and SROI space however don’t take our name too literally. We also deliver:
Social Research – research that helps others to clarify where they stand, make their case, and extend their influence.
Business Planning and Feasibility – we can help with feasibility studies, outline and full business cases
Strategy development and programme delivery – Social Value Lab helps to develop strategies that can deliver better service outcomes in a more joined-up, efficient, and sustainable way.And we can be a “critical friend” to organisations to measure results and continually improve.
Evaluation and support – Social Value Lab carries out rigorous evaluation work following Magenta Book guidance – Magenta Book guidance refers to the UK government’s recommendations on how to evaluate programs and policy interventions. Following Magenta Book guidance means adhering to standards around issues like transparency, proportionality, and value for money when conducting program evaluations. Social Value Lab also helps others to do the same. Our focus is on outcomes – gauging the changes, benefits, learning or other effects that result from activities.
If you want to clearly demonstrate and improve the social impact of your organisation or program, get in touch with our experts at Social Value Lab. They provide training and consultancy in social value measurement frameworks like SROI to help you quantify your positive change. Contact us today to learn more about measuring and maximising your social impact!
