Social Return On Investment (SROI) for non-profits

The non-profit sector employs 1.2 million Canadians and raises $24 million for projects in Canada and around the world.  In 2012, over 13.3 million Canadians age 15 and over volunteered with a non-profit, and almost 84 percent of Canadians donated to one.

Non-profits are an important pillar in our society.  They play a significant role in the economy, in the lives of those they help or enrich, and in our national psyche, as they allow us to give back to a cause that’s bigger than ourselves.

Why then is it so hard for non-profits to measure the impact they have?  By measurement, I’m not talking about how many homework clubs run, endangered species saved, or schools built.  These are fairly easy results to track – and they are important.  But they only tell one side of the story.

The other side is the long-term value, or social return on investment (SROI) that non-profits create for society.  It’s unfortunate that this story rarely gets told, as it’s the most compelling one for donors to hear.

Measuring the SROI can be complicated and require resources, but the results will help non-profits make a stronger case for giving and ensure that they are spending their donor dollars wisely.  In my next blog post I’ll look at how non-profits can measure SROI and uncover their most powerful stories.