Social Return on Investment (SROI) and Social Impact Bonds (SIBs) are two ideas that are increasingly mentioned in the same breath. SROI is a measurement and accounting framework and SIBs are a way to contract and finance a service. Both require three common ingredients:
- the quantification of one or more social outcomes for beneficiaries,
- a valuation of these outcomes, and
- an estimation of the cost of delivering these outcomes.
While not a necessary ingredient, SROI can contribute to the design, operation and evaluation of SIBs.
*NB the word ‘outcome’ is used here to represent a change in someone’s life – some readers (particularly from the US) may use the word ‘impact’ to mean the same
Emma Tomkinson 