Social Return on Investment (SROI) is a structured way to understand, evidence, and (where appropriate) value the outcomes created by an activity, compared with what was invested. It combines stakeholder voice, outcome evidence, and transparent assumptions so decision-makers can see what changed, for whom, and how confident you are.

SROI is most useful when you need to make outcomes comparable and decision-relevant (for funding, commissioning, investment, or strategic choices), and when you can reasonably evidence outcomes. If your goal is purely learning and improvement, you may not need monetisation—an outcomes framework or impact report can be enough.

No. Economic impact usually describes spending effects in an economy (jobs, output, multipliers). SROI focuses on outcomes for people, whānau, communities, and systems—and asks how much of that change is fairly attributable to your work.

No. Monetisation is optional and should be used where it adds clarity rather than confusion. Many high-value outcomes can be reported credibly with strong qualitative and quantitative evidence without forcing a dollar value. A good SROI is transparent about what is monetised, what is not, and why.

Double counting happens when the same change is valued twice (for example, valuing both “improved mental wellbeing” and “reduced healthcare use” when the second is partly a consequence of the first). A simple safeguard:

• Define outcomes so they are distinct (no overlaps)

• Choose valuations that match one level of change (either the experience outcome or the downstream cost consequence)

• Keep a valuation log stating what each proxy represents (and what it does not represent)

These are the core “don’t over-claim” adjustments:

• Deadweight: what would likely have happened anyway

• Attribution: how much of the change was due to others (services, whānau support, wider conditions)

• Displacement: whether benefits are offset by harms elsewhere

• Drop‑off: whether outcomes fade over time
  You don’t need perfect precision, but you do need clear reasoning and conservative choices.

Use a discount rate that matches your purpose and aligns with New Zealand public-sector expectations where relevant (for example, Treasury guidance for social/public investment contexts). The critical thing is to state the rate, justify it, and run sensitivity testing so readers can see how much it changes the result.

Sensitivity analysis tests how your result changes when key assumptions change (for example: attribution, deadweight, outcome duration, proxy values, discount rate). It’s how you show whether your SROI is robust or fragile. Funders often trust an SROI more when it includes a realistic range rather than a single “perfect” number.

Use the shortest horizon that still reflects reality. If outcomes are likely to last 6–12 months, don’t model 5 years. If outcomes plausibly last years, explain the mechanism and evidence. Time horizon is one of the biggest drivers of the ratio, so treat it as a high-scrutiny assumption.

Include them. SROI credibility improves when you acknowledge trade-offs and unintended effects (for example, participant stress during transition, staff workload, or impacts on whānau). You can report negative outcomes qualitatively and, where defensible, include them quantitatively.

Yes—if you’re honest about uncertainty. Use triangulation (stakeholder voice + administrative data + practitioner evidence), document limitations, and avoid false precision. A conservative SROI with clear evidence boundaries beats a confident number built on sand.

It’s usually not the highest ratio. It’s the one that is:

• clear about scope and stakeholders

• grounded in evidence of outcomes

• transparent about proxy choice and assumptions

• conservative about attribution and time horizon

• tested with sensitivity analysis

• presented in a report that a third party could follow and replicate