Social Return on Investment
An SROI for microenterprise is a valuation method that estimates and projects the personal and public benefitsthe social returna microenterprise program creates for every dollar invested in it. Benefits can be shown for:
- microenterprise owners and employees;
- local and state governments; and
- the local economy.
In 2003 MicroTest and FIELD began to explore the development of a microenterprise-appropriate SROI. Initial conversations with a series of leaders from the field helped detail the needs for an SROI for microenterprise:
- to help make the case that microenterprise is a good investment of scarce philanthropic funds;
- to speak the language of social investors and funders;
- to provide MicroTest members who produce performance and outcomes data with an advocacy and fund-raising tool;
- and to provide a credible and transparent SROI to those outside the microenterprise industry.
Based on these conversations and extensive research, a simple SROI calculation tool was designed and tested using MicroTest members' data. A training session was then offered at the annual MicroTest members meeting on the methodology, assumptions and tool usage.
Sparked by the initial model, there was interest among a group of microenterprise development organizations to develop a more comprehensive SROI model that could summarize the benefits of microenterprise that are not directly measurable. A working group was convened in 2005 to explore the development of an in-depth SROI model. Although the foundation has been laid for this effort, funds are not currently available to pursue additional SROI research at this time.
A joint presentation by staff from MicroTest and Women's Initiative for Self-Employment at the 2005 Annual AEO Conference, examines the key elements of an SROI. The presentation begins by explaining an SROI, moves to exploring the challenges and issues in developing an SROI, and concludes with an examination of a current MicroTest SROI model. Additional resources are included at the end of the PowerPoint.