Intr Intr
oduction oduction
on outcomes, and a forecast SROI will provide the basis for a framework to capture
outcomes. It is often preferable to start using SROI by forecasting what the social value
may be, rather than evaluating what it was, as this ensures that you have the right data
collection systems in place to perform a full analysis in the future.
The level of detail required will depend on the purpose of your SROI; a short analysis
for internal purposes will be less time-consuming than a full report for an external
audience that meets the requirements for verification.
The principles of SROI
SROI was developed from social accounting and cost-benefit analysis and is based on
seven principles. These principles underpin how SROI should be applied and are set
out in full in the Resources Section (page 80). The principles are:
• Involve stakeholders.
• Understand what changes.
• Value the things that matter.
• Only include what is material.
• Do not over-claim.
• Be transparent.
• Verify the result.
Judgement will be required throughout an SROI analysis. Often the principle of
materiality will guide judgement, so this principle is very important. Materiality is a
concept that is borrowed from accounting. In accounting terms, information is material if
it has the potential to affect the readers’ or stakeholders’ decision. A piece of information
is material if missing it out of the SROI would misrepresent the organisation’s activities.
For transparency, decisions about what is material should be documented to show why
information has been included or excluded. At certain points we will indicate when it
is useful to perform a materiality check. We encourage you to become familiar with the
concept as it will inform your decisions throughout the process.
2
The stages in SROI
Carrying out an SROI analysis involves six stages:
1 Establishing scope and identifying key stakeholders. It is important to have clear
boundaries about what your SROI analysis will cover, who will be involved in the
process and how.
2 Mapping outcomes. Through engaging with your stakeholders you will develop an
impact map, or theory of change, which shows the relationship between inputs,
outputs and outcomes.
2 Guidance from AccountAbility recommends that you consider the views of your stakeholders, societal norms, what your peers
are doing, financial considerations, and organisational policies and objectives as criteria for judging materiality.
A guide to Social Return on Investment 
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