New Metrics

How to Calculate SROI for Traditionally Overlooked Social Impacts

While quantifying and valuing the true costs and benefits of environmental impacts has matured, doing the same for social impacts remains elusive.

By Dr. Taryn E. Fisher | Published 9 years ago | About a 2 minute read

While quantifying and valuing the true costs and benefits of environmental impacts has matured, doing the same for social impacts remains elusive.

On Tuesday, during a series of in-depth workshops kicking off New Metrics ’15, Bea Boccalandro, president of VeraWorks, offered a three-hour crash course on ways to do so. For firms just starting their SROI (sustainable return on investment) measurement journey, Boccalandro recommended identifying examples of well-bounded projects such as workforce development or clearly scoped programs linked directly to a given product line, and recommended using an established model such as the theory of change framework to structure SROI initiatives. In this way, inputs (such as employee labor) are resources, outputs are activities (such as volunteers removing litter from a riverbank), and outcomes are accomplishments (such as 20 tons of trash collected).

With SROI initiatives, firms can measure either direct, indirect, or indicated results. An example of a direct result might be quantified — such as meals provided to 100 homeless individuals on the Thanksgiving holiday — while an indirect result might be quantified using an established indicator such as the correlation between exercise and well-being, and employee participation in gym membership. Reasons for firms to track and report SROI include accountability, transparency, and business decision-making. In addition, while firms committed to SROI may enjoy improved reputation and may attract supporters, there’s also a moral imperative for measuring outcomes — to ensure that a given effort does no harm. For example, do the unintended consequences of a program outweigh the benefits?

At the start of the workshop, when audience members were asked whether it would be feasible to implement SROI metrics within a six-month timeframe, the group split roughly 50/50 into opposing camps. After Boccalandro gave permission to let go of the quest for perfectly benchmark-able, accurate outcomes, reticent audience members gained confidence and most joined the camp of those believing that establishing social impact metrics in less than a year is feasible — even highly feasible.