What is Social Return on Investment and How to Calculate it? (With Steps, Formula and Examples)

Social Return on Investment is a framework that measures the social, environmental, and economic value generated for every rupee invested in a CSR project. It converts outcomes into monetary terms, helping organisations understand whether their programmes create meaningful change. SROI is important because it promotes accountability, evidence-based decision making, and transparent CSR-2 compliant reporting.

Introduction

Companies across India are increasingly asking one critical question:
“For every rupee we spend on CSR, what real change are we creating?”

This is where Social Return on Investment (SROI) becomes essential. Unlike simple output metrics, such as number of students trained or trees planted, SROI quantifies true, transformative outcomes like increased incomes, improved health, reduced carbon emissions, or enhanced learning levels.

In a landscape where CSR spending crossed ₹25,000 crore in 2023, organisations want credible, data-backed evidence of impact. SROI enables exactly that.

What is Social Return on Investment (SROI)?

SROI is an impact measurement methodology that assigns monetary value to social, environmental, and economic outcomes created by a programme.

In simple words:
It tells you how much social value is generated for every ₹1 invested.

Example

• A livelihood programme costs ₹50 lakh

• It led to income increases worth ₹2 crore for women beneficiaries

• SROI = 2,00,00,000 / 50,00,000 = 4:1

Meaning:
Every rupee invested generated ₹4 in social value.

Types of SROI

1. Forecast SROI

Used before a project starts. Helps decide whether to invest.
Example:
A corporate uses SROI projections to compare two skill development models—digital retail vs. tailoring. The model with higher forecast SROI receives funding.

2. Evaluative SROI

Used after implementation to assess actual outcomes.
Example:
An education NGO conducts an evaluative SROI and discovers that improved learning outcomes created value 2.5× higher than infrastructural upgrades.

Why is SROI Important for CSR?

1. It Converts CSR Efforts into Tangible Value

Most CSR reports list activities, not real impact.
SROI answers:

• Did incomes rise?

• Did health improve?

• Did carbon footprint reduce?

Example:
A water project reduces women’s daily water collection time by 2 hours.
SROI values this time in monetary terms to show real productivity gains.

2. It Enables Evidence-Based Decision Making

Leaders can compare which interventions deliver the highest value per rupee.
Example:
A corporate finds that:

• Nutrition programme SROI = 1.8

• STEM education programme SROI = 4.2
  Funding is redirected to the more impactful model.

3. It Enhances Transparency and Trust

SROI provides confidence to:

• Boards

• MCA auditors

• Investors

• Beneficiaries

• Project partners

Numbers build legitimacy.
Instead of “200 farmers trained”, SROI reveals:
“₹1 invested created ₹3.7 in improved farm income.”

4. It Helps with CSR-2 and MCA Compliance

The Ministry of Corporate Affairs increasingly promotes:

• Outcome-based CSR

• Data-driven reporting

• Impact assessments for large projects

SROI provides a structured methodology to show compliance during audits.

5. It Highlights Hidden or Intangible Benefits

Many CSR benefits are not immediately visible:

• Confidence gained among girls

• Higher school attendance

• Reduced stress after access to clean water

SROI captures these indirect yet powerful outcomes.

The Six-Step SROI Process (Simplified)

1. Stakeholder Identification

Beneficiaries, community leaders, NGOs, government bodies.

2. Mapping Outcomes

Outputs vs. outcomes vs. long-term change.
Example:
Training → Knowledge → Job placement → Income increase.

3. Evidencing Outcomes

Collecting data from surveys, attendance records, health tests, learning assessments.

4. Monetising Outcomes

Assigning financial value using:

• Market rates

• Opportunity cost

• Productivity gains

• Public expenditure saved

5. Calculating Impact

Adjust for:

• Deadweight

• Displacement

• Attribution

• Drop-off

6. Reporting and Communicating Results

Presenting SROI ratio + narrative + case stories.

Examples of SROI in Different CSR Sectors

1. Education

An EdTech intervention improves foundational learning in a district.

• Cost: ₹1 crore

• Social value: ₹4.7 crore (future earning potential)

• SROI = 4.7

2. Health

Telemedicine program in rural areas reduces travel and income loss.

• Cost: ₹25 lakh

• Savings + productivity gained: ₹1.2 crore

• SROI = 4.8

3. Livelihoods (Women’s SHGs)

Women trained in digital entrepreneurship increase monthly income by ₹3,000.

• Annual programme cost: ₹40 lakh

• Value created: ₹1.6 crore

• SROI = 4.0

4. Environment (Tree Plantation)

Urban forestry reduces air pollution and increases property value.

• Cost: ₹30 lakh

• Social value created: ₹1.1 crore

• SROI = 3.6

5. Water & Sanitation (WASH)

New RO plants reduce waterborne diseases by 37%.

• Cost: ₹20 lakh

• Healthcare savings + productivity: ₹58 lakh

• SROI = 2.9

How iAmpact Helps Organisations Measure SROI Accurately

iAmpact makes SROI more reliable and easier to compute through:

1. AI-Based Data Capture

• Automated WhatsApp surveys

• On-ground partner reporting

• Geotagged photos and timestamps
  Ensures clean, verified beneficiary data.

2. Built-In SROI & Cost-Benefit Models

• Ready templates

• Automated monetisation

• Industry benchmarks

• Real-time SROI dashboard

3. Outcome Tracking Framework

Clear logic models from input → output → outcome → impact.

4. Audit-Ready CSR Reports

MCA-aligned formats including CSR-2 & BRSR-ready outputs.

5. Impact Comparison Across Projects

Helps CSR managers prioritise high-value interventions.

Conclusion

SROI is not just a framework, it's a mindset shift.
It encourages organisations to focus on outcomes, not activities.
In the evolving CSR landscape where accountability, transparency, and efficiency matter more than ever, SROI helps companies justify investments and design smarter interventions.

With platforms like iAmpact, the process becomes effortless, credible, and scalable.

FAQs

1. What is a good SROI ratio?

Most CSR projects in India range between 2:1 to 5:1, but context matters. Higher is not always better — credible evidence matters more than ratio size.

2. Is SROI mandatory for CSR projects?

Not mandatory, but highly recommended for large projects as per CSR-2 and impact assessment expectations.

3. How is SROI different from ROI?

ROI measures financial returns.
SROI measures social, environmental, and economic value, often intangible.

4. Can small NGOs calculate SROI?

Yes. Even small organisations can use simplified SROI to demonstrate value to donors.

5. How long does SROI measurement take?

Typically 2–12 weeks depending on project scale and data availability.

6. Does SROI work for behavioural change projects?

Absolutely. SROI can monetise outcomes like improved confidence, reduced stress, higher attendance, etc.

7. Can AI improve SROI calculations?

Yes. Platforms like iAmpact automate data collection, reduce human error, and generate near real-time SROI dashboards.

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