Measurement Guidelines

SMI acknowledges that a standard approach to measuring SROIs is needed so that approaches and organizations succeeding in the fight against poverty are identified.  It understands, though, that a standard metric inevitably leaves out benefits of interest and often great value to funders and beneficiaries.  SMI advocates the following approach of generating standard SROI estimates, which can be usefully compared across programs, but also variations tailored to the individualized needs and interests of funders and suppliers.

  • Our standard SROI measurement considers results to disadvantaged beneficiaries that lead to real income (or consumption) increases1 over the ten–year period following receipt of services.
  • All financial donations and investments that funded the products or services that led to the results identified in #1 must be included as program costs, even if those donations and investments were received or expended over multiple years.
  • Separate SROI variants may include other results of interest to funders or program providers, including benefits realized by taxpayers/society (e.g., increased tax revenue, reduction of public assistance costs).  SROI variants that include both the value of contributed resources and volunteered time and financial investments/donations as program costs may also be calculated.
  • Program beneficiaries are identified and only results realized by beneficiaries earning less than specified thresholds are included in the standard SROI measurement.  Results realized by other beneficiaries may be included in separate SROI variants.
  • “What if” scenarios are developed through interviews with experts and beneficiaries and their peers so an appropriate baseline case can be established and used to calculate the program’s appropriate share of / credit for identified marginal results it caused.
  • Values are assigned to results based on interviews with small samples of beneficiaries and experts, where possible, and, otherwise, based on third party studies of the value of specified results.  In the latter case, follow-up investigations will be performed, where possible, to verify that correlations made in the third-party studies are appropriate.  In every case, assumptions regarding the valuation of results should be made explicit.
  • Best estimates of results and their values from a small (i.e., fewer than a statistically significant), fairly random sample of program providers, observers, and beneficiaries are encouraged in most cases.  Range estimates for both variables (e.g., a 40 to 50% higher probability of getting hired) are both allowed and encouraged, although best single SROI estimates also must be made.
  • All values should be discounted to present value, unless noted otherwise.
  • All SROI estimates should be verifiable through, for example, interviews of beneficiaries, their peers and experts.
  • Program risks should be identified, as well as variations among beneficiaries, and adjustments to SROI estimates should be made accordingly.
  • They are ’Social’ ROI because benefits accrue to people other than donors/investors. This distinguishes SROIs from normal financial ROIs which accrue to investors.
  • Like financial ROIs they allow fair comparisons across all projects when done appropriately.
  • SMI feels that SROIs are the price of attaining valuable results for disadvantaged people. Unlike with ROIs, a high SROI indicates that results have low prices while a low SROI indicates that results have high prices.


1 We recommend valuing results in terms of their real income value to beneficiaries – what they would or should pay for the results]