ABSTRACT
This chapter centres on Social Return on Investment (SROI), a technique for measuring social impact based on financial measures. Before examining the techniques of SROI in detail, it will be helpful to look at an economic tool which is likely to have been the inspiration of the SROI technique. In the development community since the 1970s, the social impacts of projects funded by the World Bank and the International Finance Corporation as well as by national governments, have been assessed using the technique of ‘economic rate of return’ based on social cost benefit analyses. From the perspective of traditional economics, a perfect market system ensures that the market rate of private return to an investor is always at a level such as to maximize the overall social return.
