[Adapted from: Glanz A and Knapp M (2017) Understanding substantive and theoretical issues in long-term care. Glossary of key terms. From: Social Protection Investment in Long-Term Care Project, HORIZON 2020 - Grant Agreement No 649565. European Union. (The resource is accessible here)]
Social return on investment (SROI) has its origins in the third sector, originally developed by the Roberts Enterprise Development Foundation in 1996 as a response to the perceived shortcomings of cost benefit analysis, CBA (Roberts Foundation 1996). From its inception, SROI has developed with influences also from sustainability reporting and financial accounting.
SROI is essentially a framework of seven principles (Social Value International 2015) that places the experiences of stakeholders at the centre of analysis to understand what has changed as a result of activities. Subsequently, the monetisation of direct and indirect changes, framed by concerns of materiality and a desire not to over-claim is designed to increase the accountability of decision-makers.
SROI studies seek to take account of various aspects of personal and social wellbeing – tangible and intangible – as experienced by a potentially wide variety of stakeholders. It has been suggested that there are differences between SROI and CBA (Social Value 2014), but these are differences in process, implementation and stakeholder involvement, rather than fundamental differences in underlying approach.
SROI aims to value outcomes from the perspective of the stakeholder, and this could be done for various non-marketed consequences by using different techniques, such as revealed preference, stated preference, or (more recently) wellbeing valuation techniques. (This last approach is mirrored in developments in relation to CBA; see above.) SROI also requires verification, audit process, using an appropriate range of possible methods. The aim is to provide information that is ‘good enough’, which means different levels of rigour according to use and audience. Putting monetary values on non-market goods is challenging in SROI (as it is in any evaluation), especially in the long-term care field, where social valuation studies are still scarce. Consequently, results of different SROIs are not always comparable. SROI has been promoted by the UK Department of Health and Social Care as a measurement tool especially for social enterprises in health and social care (Millar and Hall 2013, Social Value UK 2014, The SROI Network 2012).
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