Abstract
Purpose - In this article we explore three technical challenges and misconceptions involved in measuring Social Return on Investment (SROI).Although there is considerable information available about the conceptual framework of SROI, its application is a relatively young discipline. As a result, there is great variability in how SROI is applied across interventions. This makes robust and consistent comparisons across social ventures difficult, while rendering the validity of SROI measures vulnerable to contestation. This article looks at some of the least discussed yet significant technical challenges and misconceptions in working with SROI, based on our experience of measuring social investment returns. Design/methodology/approach - Our approach is economic, and we approach the misconceptions and challenges of using SROI from a technical standpoint. Specifically, we identify three technical issues: the use of discount values, the incorporation of overhead costs, and determinations of the Counterfactual.Findings - We offer some solutions to these technical challenges and highlight wider issues around the drive to isolate social impact to attract funding for social enterprise.Research limitations/implications - Limitations of the paper relate to our inability, at this stage, to test out our solutions to these technical challenges with case studies.Practical implications - The practical implications of our paper are that we offer social enterprises and social impact practitioners an understanding of little-understand technical challenges related to the SROI process. We also highlight how these might be solved through alternative methods. Originality/value - The originality of our paper is that we use an economic analysis to highlight little-understood technical challenges with SROI.
Purpose - In this article we explore three technical challenges and misconceptions involved in measuring Social Return on Investment (SROI).Although there is considerable information available about the conceptual framework of SROI, its application is a relatively young discipline. As a result, there is great variability in how SROI is applied across interventions. This makes robust and consistent comparisons across social ventures difficult, while rendering the validity of SROI measures vulnerable to contestation. This article looks at some of the least discussed yet significant technical challenges and misconceptions in working with SROI, based on our experience of measuring social investment returns. Design/methodology/approach - Our approach is economic, and we approach the misconceptions and challenges of using SROI from a technical standpoint. Specifically, we identify three technical issues: the use of discount values, the incorporation of overhead costs, and determinations of the Counterfactual.Findings - We offer some solutions to these technical challenges and highlight wider issues around the drive to isolate social impact to attract funding for social enterprise.Research limitations/implications - Limitations of the paper relate to our inability, at this stage, to test out our solutions to these technical challenges with case studies.Practical implications - The practical implications of our paper are that we offer social enterprises and social impact practitioners an understanding of little-understand technical challenges related to the SROI process. We also highlight how these might be solved through alternative methods. Originality/value - The originality of our paper is that we use an economic analysis to highlight little-understood technical challenges with SROI.