How’s this for an investment opportunity? Cough up a few million dollars towards a housing for homeless program. Wait for it to succeed, then collect that cash back in your pocket plus a cool 20 per cent in interest fees.
Welcome to the world of social impact bonds, which the federal government is considering to help the private sector fund the public sector.
More or less everyone involved in social enterprise agrees that demonstrating your impact is really important but not very many are actually doing it.
This is particularly true in the case of the UK government’s impact measurement framework of choice, Social Return On Investment (SROI).According to nef: “Social Return on Investment is an analytic tool for measuring and accounting for a much broader concept of value, taking into account social, economic and environmental factors.”
SROI is commonly used to come up with figures for the social value (or social impact) generated by products and services, such as the example quoted by nef that: “£1 invested in high-quality residential care for children generates a social return of between £4 and £6.10.”