Social enterprise and the measurement of social value: methodological issues with the calculation and application of the social return on investment

Abstract

This article considers the methodological challenge of quantifying the social value generated through social enterprise activity. It argues that in the context of increasing enthusiasm for social enterprise as a mechanism for delivering social services and for tackling social exclusion, it is increasingly necessary to be able to value social impacts. Further it will be necessary to be able to assess the potential creation of social value from different investments in social enterprise. Specifically, this article considers methodology of social return on investment (SROI). SROI has become increasingly promoted in both policy and practice in the United States and the United Kingdom. This article considers the development of this methodology and draws on lessons from international development to highlight the limitations of the current use of SROI.