Readily available, commonly accepted systems that enable nonprofits to compare their results to their costs do not currently exist. Despite advances in knowledge about what the social sector does and how it does it, we really do not know what it costs to accomplish social mission goals. Until we have systems that address this need, we won’t be able to credibly assess social investment returns. Social Return On Investment (SROI) is a concept that has been embraced by the field as one standard for determining social ROI in the nonprofit sector. In this paper, REDF proposes significant improvements to existing SROI approaches.

This is the second article in REDF’s “Stepping Out of the Maze” series. The series grew out of our concern for the environment in which nonprofits carrying out critical social change must operate. The series of three articles explores possible improvements and how they might be achieved. We are grateful to The Aspen Institute’s Nonprofit Sector and Philanthropy Program for funding critical elements of this series.

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