Calculation of social return on investment (SROI) ratio of a local ecological initiative
To create a reporting system that illustrates the social results of an ecological initiative and that this represents a substantial challenge, especially when it has an extremely small budget and is new. The study shows that it is, nevertheless, possible to develop such a system using Social Return on Investment (SROI) methodology. The Russian ecological movement “Razdelniy sbor” (“Separate collection”) from the city of St. Petersburg has been used for the evaluative (retrospective) SROI case study.
The study contains a quick overview of SROI methodology with links to relevant articles and guidelines. It touches on aspects of identifying stakeholders and building a theory of change. A system of indicators has been developed for the purpose of estimating social impact, while financial proxies for outcomes have been corrected for attribution and deadweight. The study may therefore be of interest from both the theoretical and practical standpoint. It can be used as an example for estimating the social value of a similar initiative, and additionally, addresses several important issues concerning SROI methodology.
It argues for using the prudence concept in evaluating resources and outcomes, calls for detailed analysis of negative outcomes, emphasizes the importance of choosing appropriate discounting methods. Taking these steps prevents SROI ratio from being overestimated and ensures the transparency of SROI reports. The study also shows possible reasons for low SROI ratios (below 1) and proposes ways to increase social efficiency.