SROI
SROI is a framework for measuring and accounting for value of social investment. This method is used for measuring extra-financial value (i.e., environmental and social value not currently reflected in conventional financial accounts) relative to resources invested.
SROI is about value, rather than money. It explains social value created by INR 1 invested.
Limitations of the SROI Model
Some outcomes and impacts (for example, increased self-esteem, improved family relationships) cannot be easily associated with monetary value. In order to incorporate these benefits into the SROI, appropriate proxies for such values would need to be used. SROI analysis is at an evolvingstage andmethods of monetizing different outcomes is likely to become more acceptable. With anincreasing number of people using the same proxy will lead to a standard matrix which can be used commonly across the sector.
The seven principles of SROI are
Involve stakeholders
(i.e. everyone who has a 'stake' or an interest)
Understand what changes
Understand what changes (for those stakeholders)
Value what matters
Value what matters (also known as the 'monetization principle’)
What is material
Only include what is material
Do not over-claim
Do not over-claim
Be transparent
Be transparent
Verify the result
Verify the result