Overview
Social Return on Investment (SROI) is a methodology used to measure the social and financial returns of investments, typically in the context of social enterprises, non-profits, and impact investing. Developed by the Roberts Enterprise Development Fund (REDF) in the 1990s, SROI aims to quantify the social benefits of an investment, such as improved health outcomes, education, or environmental sustainability, and express them in monetary terms. By assigning a financial value to social outcomes, SROI helps investors, organizations, and policymakers evaluate the effectiveness of their investments and make informed decisions. For instance, a study by the Social Impact Analysts Association found that every dollar invested in social programs generated an average return of $3.41 in social benefits. However, critics argue that SROI can be subjective and difficult to measure, and that it may not capture the full complexity of social issues. As the impact investing market continues to grow, with an estimated $30 trillion in assets under management by 2025, SROI is likely to play an increasingly important role in shaping investment decisions and driving social change.
Key Facts
- Year
- 1990
- Origin
- Roberts Enterprise Development Fund (REDF)
- Category
- Economics and Finance
- Type
- Concept