Using Social Return on Investment (SROI) to measure, analyze and assess impact
Social Return on Investment
Economic Impact Per Year (at scale)
Growth of Organization
We support organizations with quantifiable social impact. A key tool the Centre uses to assess and communicate impact is social return on investment (SROI). In collaboration with the Boston Consulting Group, LEAP develops SROI models to measure and account for social, environmental, and economic costs and benefits of the interventions in the portfolio.
The concept of social return on investment is broader than that of accounting and financial return on investment. SROI is about the value a particular intervention contributes to society and less about money. We do not use SROI to compare charities, but rather, to gain a deeper understanding of the social impact being achieved by specific programs.
We interpret social return on investment through the lens of government savings. As more game-changing interventions are scaled across Canada and address the most pressing needs of vulnerable communities, the government is able to channel funds towards other areas. SROI enables the Centre to measure the present value of a program’s future benefits to society.
Case Study in SROI: Pathways to Education
Pathways to Education is a community-based program for high school students from low-income families that aims to break the poverty cycle by reducing high-school dropout rates. The program provides students with tutoring, mentoring, and financial support. Pathways gained access to crucial data by getting the school board to agree to share course and graduation outcomes for each student who signed up for the program.
To determine the social impact of the program, BCG conducted an analysis in 2007. The SROI that BCG quantified was remarkably high—the study showed that every dollar invested in Pathways delivered $24.50 in social returns for the broader community, through students’ higher income and taxes in later years, or by their avoiding social costs in health care or the justice system. The results confirmed the beliefs of Pathway’s founders—that removing the barriers to a good education would allow low-income students to achieve the same academic success as their more affluent peers. LEAP applies this approach in its engagement with non-profit organizations in its portfolio to identify, measure, and maximize social impact.