What Is SROI and How Is It Calculated?

Sooner or later, someone asks a CSR or TJSL manager for the SROI of a program: a director, a donor, or a PROPER assessor reviewing a social innovation. Social Return on Investment (SROI) answers a plain question, how much value a program created compared with what was invested, but a credible answer takes more than dividing one number by another

This article covers the method, its standard, a rupiah example, common mistakes, and its use in TJSL BUMN and PROPER

What Is SROI?

A Guide to Social Return on Investment, the main reference for the method, defines SROI as a framework for measuring and accounting for a broad concept of value that includes social, environmental and economic costs and benefits. Outcomes such as higher income, better health or time saved are given monetary values through financial proxies and compared with the investment, usually as a ratio: 3:1 means that each rupiah invested is estimated to have created three rupiah of social value

The ratio is a summary, not the finding. The Guide stresses that SROI is about value rather than money, which serves only as a common unit. Much of the value never appears as cash, so 3:1 does not mean anyone received three rupiah back. A good report tells the story of change with qualitative, quantitative and financial evidence and states every assumption

Evaluative and Forecast SROI

An evaluative SROI is done after the fact, using outcomes that have actually happened. A forecast SROI estimates the value a program will create if it achieves its intended outcomes. The Guide notes that starting with a forecast is often better, because it shows which data to collect. An evaluative analysis can take several months, less if good outcome data already exists

Who Sets the Standard for SROI

SROI grew out of social accounting and cost benefit analysis. The SROI Network, set up in 2007 as a membership body for its advocates, later became two linked organizations: Social Value International (SVI), the global network that sets standards for social value practice, and Social Value UK, now the Institute for Social Value. The Guide was first published by the UK Cabinet Office in 2009, updated in 2012, and is free to download from SVI

The 2012 Guide builds SROI on seven principles. SVI now lists eight Principles of Social Value: involve stakeholders, understand what changes, value the things that matter, only include what is material, do not overclaim, be transparent, verify the result, and be responsive. The eighth, added later, asks organizations to act on what the account shows. SVI also runs independent report assurance and a free database of published SROI reports

How SROI Is Calculated in Six Stages

The Guide sets out six stages, which overlap in practice

1. Establish scope and identify stakeholders. Agree on the purpose, audience and boundaries, and list everyone who experiences change, positive or negative
2. Map outcomes. Build an impact map with stakeholders that shows how inputs lead to outputs and outcomes. Completing training is an output; getting a job is an outcome
3. Evidence outcomes and give them a value. Collect indicator data, estimate how long each outcome lasts, and assign a financial proxy, such as income gained or the cost of a comparable service
4. Establish impact. Deduct deadweight (what would have happened anyway), displacement (gains offset by losses elsewhere) and attribution (the share created by others), and apply drop off to outcomes that fade over time
5. Calculate the SROI. Project values over the duration of each outcome, discount them to present value, divide by the value of inputs, and test the result with a sensitivity analysis
6. Report, use and embed. Share findings with stakeholders, act on them, build routine outcome data collection into the program, and arrange verification

In stage 5, the SROI ratio divides the present value of benefits by the investment, while the net SROI ratio divides the net present value (benefits minus investment) by it. Both are accepted if the report says which one it uses. For sensitivity, the Guide recommends showing how far each key estimate must change for the ratio to fall to 1:1

A Simple Example in Rupiah

The figures are hypothetical and rounded, for illustration only. A livelihood program costs Rp 1 billion. In one year, 200 farming households each earn Rp 10 million more in net income; for simplicity, the outcome lasts only that year

Without the two deductions, the program would claim 2:1; with them, about 1.1:1. The deadweight might come from comparison villages where incomes also rose, and the attribution from a district extension service that trained the same farmers. Each percentage needs evidence and an explanation in the report

Common Mistakes That Weaken an SROI

• Overclaiming. Counting every positive change as the program's own, against the principle "do not overclaim"
• Leaving stakeholders out. Outcomes and proxies chosen at a desk miss what beneficiaries value, including negative or unintended changes
• Weak proxies. Credible proxies come from reputable published sources or your own research. Average unit costs can overstate savings when a program changes only part of the cost
• Ignoring deadweight and attribution. In the example above, these two deductions cut the claim by almost half
• Treating the ratio as profit. A 3:1 ratio estimates social value, not cash returned to the company or to beneficiaries
• Comparing ratios across programs. The Guide warns against comparing ratios alone between organizations, because stakeholders and judgments differ. Compare a program with its own results over time

SROI in Indonesia: TJSL BUMN and PROPER

TJSL BUMN

TJSL programs of state owned enterprises are governed by Minister of BUMN Regulation PER-1/MBU/03/2023. It sets measurable impact (terukur dampaknya) as a principle and makes measuring TJSL performance part of the directors' key performance indicators, but names no measurement method. SROI comes from ministry guidance: a December 2023 presentation by the Ministry of BUMN listed SROI measurement of flagship TJSL or creating shared value (CSV) programs among five TJSL priorities, with KPI targets for the 2023 and 2024 company work plans (RKAP) of at least three programs measured with SROI. In October 2025 the ministry was replaced by the BUMN Regulatory Agency (BP BUMN), so check its current guidance

PROPER

PROPER, the national rating of corporate environmental performance, is now run by KLH/BPLH (Ministry of Environment/Environmental Control Agency), which took over this role from the former KLHK in 2024. Its current rules, Permen LH/BPLH 7/2025, in force since 28 August 2025, replaced Permen LHK 1/2021. The regulation lists social innovation among the areas beyond compliance and states that it is assessed with the SROI method. A flagship social innovation program is one of the conditions for Gold candidates, and the annex scores the SROI work, including the competence of the report's author. SROI was already used for social innovation under the 2021 rules. Our TJSL and PROPER article covers both in more detail

When SROI Is the Right Tool

SROI is worth its cost when a decision depends on weighing value against resources, such as choosing between program designs or making the case for long term funding. The Guide says it is less useful when a strategy is already fixed, when stakeholders are not interested in the results, or when the only aim is to prove value with no chance of changing anything. For a small or short program, clear outcome indicators, a baseline and honest monitoring are often enough

The impact map traces the same chain of change as a Theory of Change (see Theory of Change vs Logical Framework), and a MEL system collects the outcome, deadweight and attribution evidence that an evaluative SROI needs

1. Theory of Change
2. Forecast SROI
3. MEL Data Collection
4. Evaluative SROI
5. Learning and Redesign

Conclusion

SROI is a disciplined way to account for the value a program creates, expressed in money so that it can be weighed against cost. Its credibility comes from the steps that shrink the headline number: stakeholder involvement, evidenced proxies and honest deductions. Read the ratio with its assumptions, and use it to improve the program, not only to report on it

SIDIA's Monitoring, Evaluation & Learning service applies SROI principles when measuring what changed after a program ends