Guide to Giving
NEWS  |  General, Leadership, Research

Social Return on Investment Not Exploited by NFPs

Wednesday, 5th May 2010 at 1:02 pm
Staff Reporter
Charities are not exploiting the full potential of Social Return on Investment (SROI) analysis according to a UK Think Tank.

Wednesday, 5th May 2010
at 1:02 pm
Staff Reporter



Social Return on Investment Not Exploited by NFPs
Wednesday, 5th May 2010 at 1:02 pm

Social Return on Investment (SROI) is a hot topic yet many charities and funders do not fully understand how SROI works or whether it is a tool they should be using it, according to UK Think Tank, New Philanthropy Capital (NPC).

Lucy Heady, Head of Measurement at NPC says SROI can be seen as a type of economic analysis closely related to cost-benefit analysis. 

Heady says it focuses on listening to stakeholders and identifying the outcomes that are important to them, and then putting a financial value on these outcomes.

However she argues, in a new NPC Position Paper, that the full potential of SROI is currently not being exploited by the Not for Profit sector.

Firstly, Heady says many charities that calculate their SROI see it only as a fundraising tool, rather than a management tool that could help them learn where their impact is greatest and how they could improve their activities.  

And secondly, she says low levels of evidence in the charity sector hold SROI back from being adopted more widely. 

New Philanthropy Capital says SROI is an approach that demands evidence and helps charities think through where more evidence is needed, but it does not tell charities how to collect this evidence. 

It says SROI will not be an option open to more charities and funders until there is more investment in improving the evidence base of the sector.

Lucy heady says the most common question she gets asked is ‘should I do an SROI?’. 

She says people are attracted to the sexy number at the end: £2.50 of value created for every £1 put in. But they often don’t realise how big an undertaking an SROI is. 

She says for SROI to work the whole organisation needs to be bought into the process and be prepared to set up robust measurement systems.

The NPC Position Paper can be downloaded (free login required) at

Youth Affairs Committee Victoria


Helping the helpers fund their mission…...

FrontStream Pty Ltd (FrontStream AsiaPacific)

NGO Recruitment is Australia’s not-for-profit sector recru...

NGO Recruitment


Yes we’re lawyers, but we do a lot more....


More Suppliers

Get more stories like this



Majority of NFPs Are Not Believed to be Well-Run, According to New Survey

Luke Michael

Tuesday, 12th September 2017 at 4:14 pm

Why is Digital Information Management So Important for NFPs?


Tuesday, 12th September 2017 at 8:19 am

Australians Urged to Give a Gift to Charities in Their Will

Luke Michael

Friday, 8th September 2017 at 4:32 pm


New Study Warns NFPs Need Strong Culture and Profits to Survive

Luke Michael

Tuesday, 5th September 2017 at 12:02 pm

Moves to Stop Volunteering at Overseas Orphanages

Luke Michael

Wednesday, 13th September 2017 at 1:54 pm

Peak Body Demands Action to Stop NDIS Leaving Aboriginal People Behind

Wendy Williams

Tuesday, 5th September 2017 at 8:37 am

Future Uncertain for Disability Organisations Following Funding Cuts

Wendy Williams

Tuesday, 19th September 2017 at 8:29 am

Write a Reply or Comment

Your email address will not be published. Required fields are marked *

Guide to Giving
pba inverse logo
Subscribe Twitter Facebook

Get the social sector's most essential news coverage. Delivered free to your inbox every Tuesday and Thursday morning.

You have Successfully Subscribed!