SROI is a tool that helps companies and NGOs measure their social investments, putting their intervention in the community into a monetary form. It is useful for management and CSR departments because one can visualize in a ratio format the amount invested vs. the results of the social project: FOR EVERY RON INVESTED, X RON RETURNED TO THE COMMUNITY. This speaks in simple numbers to the Board of Directors, communities, shareholders and stakeholders and demonstrates why a CSR initiative was worth making and what the impact it has on the beneficiaries.

There are several methodologies to calculate SROI, but the most popular worldwide and the one that Progress Foundation also uses was developed in a program funded by the British Government. It is a complex method, which requires an objective evaluation of the inputs, a mapping of the target groups, and a transformation of the outputs and results, even those harder to compute (e.g.: soft skills) into monetary value, using financial proxies.

If the value of SROI is > 1 than the investment has had a positive impact, and improved the lives of the beneficiaries to a significant extent.

Progress Foundation started by testing the SROI report on the sponsors of its own social projects (CODE Kids and Fearless Girls) so that they could further demonstrate to the Board of Directors the social impact of the investments made. Now it extends this service to any company that wants to measure its CSR impact on the community.

What is the path to a good SROI, you ask? Investing responsibly and putting in a real effort, basing the interventions on data and realistic solutions, and most importantly thinking strategically about an intervention. Long term is always best! Why should companies use SROI? Because it speaks in simple numbers to the Board of directors, communities, shareholders and stakeholders why a CSR initiative was worth making and the impact it has on the beneficiaries.