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  Social Return on Investment (SROI) is a framework for measuring and accounting for the broad concept of value which incorporates social, environmental, economic and other benefits. SROI puts a value on the amount of change (impact) that takes place and looks at the returns to those who contribute to creating the change. It estimates a value for this change in the same language, using the same accounting and investment appraisal methods, as are used to determine financial value. Comparing this value to the investment required to achieve that impact produces an SROI ratio.

The SROI tool was first developed by the Roberts Enterprise Development Fund (REDF) in the US and is now used across the US, UK and Europe. IAOS has been working with the tool and key overseas SROI practitioners for two years, customising it to the South African context, (including South African specific guidelines like King 3 and working with corporations, non-profit organisations and investors. Revised guidance and training for SROI were introduced in 2009 and IAOS is using the new approach. This includes submitting reports for quality assurance.

IAOS are conducting SROI analyses for various organisations and corporations. Our clients have used the results of our work to assess their programs, develop and prioritise new initiatives, approach funders, demonstrate the efficacy of their programs and communicate the impact of their CSI activities and programs internally as well as externally. Furthermore the SROI approach has given them a Monitoring & Evaluation framework, which allows them to track impact on a continuous basis.

"Columba Leadership uses business discipline to achieve social change hence our commitment to making Impact Measurement a fundamental pillar of our organisation.

We decided to extend M&E and conduct an SROI analysis when we became aware that this methodology was becoming widely accepted internationally.

It is vital that we demonstrate to our donors that we are accountable to deliver impact. The SROI has contributed to building our reputation and brand as we are one of the first to embrace it in the local market and we are seen as progressive.

The fact that we deliver a positive SROI is notable and valuable when presenting to Investors. However more important than the actual ratio are the other benefits: the discipline of the process made us think very carefully and systematically about how we achieve impact. What used to appear obvious as "multiplier effect" of our work was especially interesting eg recruitment of peers at Shiyane growing group size from 20 to 80 appeared significant but using SROI we discovered at Altmont that group size had only grown to 35 but ongoing regular engagement in LO class mentoring produced a higher SROI. This feeds back into our organisational strategy e.g. we are investing in tools to catalyse peer driven learning. Also important is the feedback to our staff and their training to ensure we maximise impact."