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The leap from ROI to SROI: Farther than expected?

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  • Gargani, John

Abstract

Social return on investment (SROI) is a popular method for evaluating the impact that organizations have on society and the environment. It has its roots in finance, where return on investment (ROI) is used to evaluate investments. Over the past ten years, SROI has made the leap from a tool for building private wealth to one that advances the public good. Has it landed us in a better place? To answer the question, I describe the general approach to financial analysis, how it is applied to financial decisions, and how it has been adapted to evaluate impact. I then consider the strengths and weaknesses of SROI, and suggest how, by pushing beyond the constraints of financial analysis, it can give stakeholders voice and provide evidence of success from diverse perspectives. Along the way, I propose a conceptual model for value, a foundational concept in SROI that has been criticized by some as underdeveloped, and I include a technical appendix that identifies potential sources of statistical bias in SROI estimates. I conclude by acknowledging our growing need to incorporate efficiency as one of multiple success criteria and the role that SROI—properly implemented—can play.

Suggested Citation

  • Gargani, John, 2017. "The leap from ROI to SROI: Farther than expected?," Evaluation and Program Planning, Elsevier, vol. 64(C), pages 116-126.
    • Handle: RePEc:eee:epplan:v:64:y:2017:i:c:p:116-126
    DOI: 10.1016/j.evalprogplan.2017.01.005
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    References listed on IDEAS

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    Cited by:

    1. Ngarava, Saul & Mushunje, Abbyssinia & Chaminuka, Petronella, 2020. "Qualitative benefits of livestock development programmes. Evidence from the Kaonafatso ya Dikgomo (KyD) Scheme in South Africa," Evaluation and Program Planning, Elsevier, vol. 78(C).
    2. José Pablo Abeal Vázquez & Pilar Tirado-Valencia & Mercedes Ruiz-Lozano, 2021. "The Impact and Value of a Tourism Product: A Hybrid Sustainability Model," Sustainability, MDPI, vol. 13(4), pages 1-14, February.
    3. Samal, Parshuram & Mondal, Biswajit & Jambhulkar, Nitiprasad Namdeorao & Verma, Ramlakhan & Das, Anup Kumar & Singh, Onkar Nath, 2023. "Evaluation of crop research institutes under data and resource constraints: An alternative approach," Evaluation and Program Planning, Elsevier, vol. 97(C).
    4. Yates, Brian T., 2021. "Toward collaborative cost-inclusive evaluation: Adaptations and transformations for evaluators and economists," Evaluation and Program Planning, Elsevier, vol. 89(C).
    5. Muhammet Usak & Ming Yuan Hsieh & Yung-Kuan Chan, 2021. "A Concretizing Research on Making Higher-Education Sustainability Count," Sustainability, MDPI, vol. 13(5), pages 1-14, March.
    6. Clare, Grace & Diprose, Gradon & Lee, Louise & Bremer, Phil & Skeaff, Sheila & Mirosa, Miranda, 2023. "Measuring the impact of food rescue: A social return on investment analysis," Food Policy, Elsevier, vol. 117(C).
    7. kartikaputri, arella, 2020. "Pentingnya Social Return on Investment," OSF Preprints 4rv9a, Center for Open Science.
    8. kartikaputri, arella, 2020. "Pentingnya Social Return on Investment (SROI)," OSF Preprints y9ntg, Center for Open Science.
    9. King, Julian, 2021. "Expanding theory-based evaluation: Incorporating value creation in a theory of change," Evaluation and Program Planning, Elsevier, vol. 89(C).

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