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Social return on investment analysis you can take to funders
Social return on investment analysis you can take to funders
Sooner or later, you’ll face the question of what your programme's social results are worth in dollars. Our social return on investment (SROI) analysis gives you an investment case with a theory of change behind it and the evidence to support it. The number you present holds up to scrutiny.
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- You get the return-per-dollar and the range around it, so a council or funder can see how sure the figure is. For Te Toi Mahana the range ran from $1.44 to $4.10 of social value for every dollar invested.
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- If you need to assess several programmes, you see which create the most value and for whom. We compared five rural work-based learning programmes, and our analysis showed that the programmes serving disadvantaged young people had the highest return.
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- The programme logic and measurement framework we build with you stays in your organisation once the analysis is complete. For Te Toi Mahana that has become a shared framework for decisions and reporting.
When a funder asks what your programme is worth
Funders and central government increasingly want to understand measurable changes from social programmes, not just how many people it reached. We build the evidence with you and calculate the return, so you can answer with a number and the reasons behind it.
- Your reports count activity, not outcomes. You can say how many people you housed or trained, but not what that intervention changed for them. We map how your activities lead to outcomes, build the measurement framework, and put an ROI value on each outcome.
- Your funding is short-term and never certain. Year-to-year or one-off funding leaves good programmes exposed at every round. With a comprehensive SROI you can show a return for each programme and offer concrete reasons to keep supporting ones that work.
- Your funder asks what would have happened otherwise. A funder may ask how much of the change is yours. We model what would have happened without your programme, so the return you claim is the one you can defend.
What does an SROI analysis involve?
Social return on investment puts a dollar value on the social outcomes an initiative creates and compares that value against cost. The first step is always a theory of change. The second is a monitoring and evaluation framework that describes what you will measure, where the data will come from and how often it will be sampled. We then value the outcomes and calculate the return.
We do this as evaluators, not accountants. Interviews, case studies and evidence for each group you serve sit beside the numbers, so the ratio reflects real change for the people involved. The qualitative evidence also checks that the numbers still make sense.
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A counterfactual to isolate your contribution. We model what would have happened without your programme and compare your outcomes against that scenario, so the return is yours and not what would have happened anyway.
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A return for each group you serve. One average hides who gains most, so we model each group your programme serves separately and show what different groups get from the same investment.
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Proxies from published sources. A proxy is a value that stands in for an outcome you cannot price directly. Ours come from three places: Treasury's cost-benefit analysis tool CBAx, which holds published values for social outcomes; the Australian Social Value Bank; and published research.
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A plausibility check on the ratio. We check the result against the bands Treasury New Zealand advises. Between one and two is a realistic estimate. Between two and five, the costs and estimates need a second look. Above five, the assumptions must be very solid before the number can stand.
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A method you can see. Our SROI methodology is public. Our guide and the spreadsheet tool we use are free to download, so your team can follow every step of the calculation.
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Our process
Our approach runs from the programme logic to a ratio reported with its range. The five stages below show what happens at each step and what you receive.
What we deliver:
- A theory of change and a measurement framework. The logic links what you do to the outcomes for each group you serve. The framework sets the measures and the data behind them. Both stay with you.
- An SROI report with the ratio and its range. It gives the ratio for each group and overall. The counterfactual, the proxies and the sensitivity analysis sit alongside, so the reader can see where the ratio came from.
Understand
We start with the goal the analysis has to support and who it has to convince: a council, a funder, a board, a Minister. Then we work with your team to build or test the theory of change with the people you serve. Everything that follows rests on that theory.
Plan
We agree what to measure, which groups to model, and which proxies will stand for each outcome. If your data is thin, we find published evidence to fill the gap, and we keep the set of measures small enough for you to collect.
Deliver
We review programme documents and administrative data, and interview participants, staff and partners. We collect outcome data and costs, including indirect costs such as volunteer hours. Then we model the counterfactual, value the outcomes and calculate the ratio for each group and for the whole.
Review
We test the conclusion with you and your stakeholders, and run sensitivity analysis to find which variables move the result the most. Then we check the ratio against the plausibility bands before anything goes in the report.
Close
You receive the report with the ratio, its range and the evidence behind it. The report is written for the council, funder or board it has to convince.
Related Projects
Related Projects
Projects
Less than a minute to read
From housing to wellbeing: how Te Toi Mahana's integrated model creates $2.78 of social value for every dollar invested
Read More
Projects
Less than a minute to read
Revealing Social Returns of Rural Workforce Programmes: SROI for 5 work-based learning programmes
Read MoreFAQs
Frequently Asked Questions
How do you decide what to measure?
The measures come from the theory of change. For each group you serve, we choose the outcomes that matter most to the decision and that the evidence can support. Every measure must trace back to a change someone can point to.
How do we know the return is ours and not just what would have happened anyway?
We estimate deadweight, the share of the change that would have happened regardless, using a counterfactual model of any changes that would have occurred without your programme. We then adjust for attribution, the share that other organisations and outside factors contributed, and for displacement, benefits that other services working with the same people could claim. We keep outcomes distinct so nothing counts twice.
Can outcomes with no price tag still count?
Yes. Some outcomes have no dollar value, and some should not have one. Those sit beside the ratio as qualitative evidence and value statements, and ensure that the numbers still describe what matters to the people involved. Interviews carry that part of the story.
Can an SROI reflect the outcomes that matter to Māori and Pacific communities?
Only by working with them: what outcomes should be measured and what is in scope may look different from within the community than from the outside. So, we involve the community and the people who work with them in building the logic from the start. If your programme works within a kaupapa Māori framework, we shape the logic around that framework, with its broader and interrelated outcomes. A single measure rarely captures an outcome like that, so we use a cluster of measures rather than forcing one indicator to carry it.
We are a small organisation. Is there a simpler way to do this?
Yes, within limits: the simpler the method, the less weight the number can carry. The non-negotiable is a strong theory of change that says what you are trying to do and why you think it will work. Keep the measures targeted rather than ambitious and use published values if you cannot collect your own. We are happy to talk through what is possible without a full analysis.
Can we calculate SROI on a new programme that has no results yet?
Yes. The analysis sets out the logic for why you expect an impact and what that is likely to be. It also says how you will measure this impact as you go. If attribution is uncertain, a break-even analysis shows what’s needed for the programme to return its cost.
Does an SROI we do ourselves carry the same weight as one you do?
Some funders ask for an independent calculation. Doing it yourselves brings knowledge of the programme; using external organisations brings a fresh pair of eyes. Either way, watch for bias and record the assumptions you make, because the person reading the ratio will ask about them.
20 Topics
+200 Resources
Ready to show what your programme is worth?
Book time with an expert.
+60 Webinars
Learn More
SROI resources
Past Webinars
45 minute watch
Rethinking the Logic Model: Personae, systems, and what actually drives outcomes
Read More
Past Webinars
90 minute watch
Turning Vision into Value: Practical Tools for Social Return on Investment Analysis
Read More
Past Webinars
45 minute watch