Challenges and boundaries in implementing social return on investment: An inquiry into its situational appropriateness

Research output: Journal contributionsJournal articlesResearchpeer-review

Authors

Nonprofit organizations (NPOs) and social enterprises are increasingly under pressure to justify their use of resources and report their impact on society. Frameworks that monetize social value such as social return on investment (SROI) have emerged as a response. The existing literature highlights many benefits and technical challenges of SROI, but largely ignores strategic and organizational learning aspects. This paper explores the use of SROI in an NPO conducting cultural heritage preservation. By analyzing the challenges managers face in agreeing on a reliable (“correct”) computation of SROI and in assessing the validity and relevance (“appropriateness”) of SROI, we seek to understand the challenges and boundaries of SROI. Challenges with a reliable computation of SROI are identifying stakeholders, the choice of proxies, the time horizons, and deadweight factors. Challenges with an appropriate SROI calculation are comparability, subjectivity, legitimacy, and resource utility. We argue that SROI calculations might not be reliable or appropriate in organizations with fuzzy purposes, broad value creation goals, broad target groups, very individual or subjective proxies, strongly lagged outcomes, complex or unobservable causality, and with lack of legitimacy among stakeholders. Organizations should not trustingly adopt SROI without being aware of these limitations.
Original languageEnglish
JournalNonprofit Management & Leadership
Volume31
Issue number3
Pages (from-to)413-435
Number of pages23
ISSN1048-6682
DOIs
Publication statusPublished - 01.03.2021

Bibliographical note

Publisher Copyright:
© 2020 The Authors. Nonprofit Management & Leadership published by Wiley Periodicals LLC.

    Research areas

  • Management studies - accounting, management, nonprofit, qualitative, research, sector

Documents

DOI

Recently viewed

Publications

  1. Machine Learning and Knowledge Discovery in Databases
  2. Should learners use their hands for learning? Results from an eye-tracking study
  3. Is sensitivity for the complexity of mathematics teaching measurable?
  4. Introduction Mobile Digital Practices. Situating People, Things, and Data
  5. Visualization of the Plasma Frequency by means of a Particle Simulation using a Normalized Periodic Model
  6. Computational modeling of amorphous polymers
  7. Early Detection of Faillure in Conveyor Chain Systems by Wireless Sensor Node
  8. Formative Perspectives on the Relation Between CSR Communication and CSR Practices
  9. TARGET SETTING FOR OPERATIONAL PERFORMANCE IMPROVEMENTS - STUDY CASE -
  10. From Knowledge to Application
  11. Neural correlates of the enactment effect in the brain
  12. Machine Learning and Knowledge Discovery in Databases
  13. Competing Vegetation Structure Indices for Estimating Spatial Constrains in Carabid Abundance Patterns in Chinese Grasslands Reveal Complex Scale and Habitat Patterns
  14. Spaces for challenging experiences, indeterminacy, and experimentation
  15. Mapping Khulan habitats - a GIS based approach.
  16. Commitment to grand challenges in fluid forms of organizing
  17. Soft Optimal Computing Methods to Identify Surface Roughness in Manufacturing Using a Monotonic Regressor
  18. A Review of the Application of Machine Learning and Data Mining Approaches in Continuum Materials Mechanics
  19. Determination of 10 particle-associated multiclass polar and semi-polar pesticides from small streams using accelerated solvent extraction
  20. Training effects of two different unstable shoe constructions on postural control in static and dynamic testing situations
  21. Intraspecific trait variation patterns along a precipitation gradient in Mongolian rangelands
  22. Artificial Intelligence in Foreign Language Learning and Teaching
  23. Unraveling Privacy Concerns in Complex Data Ecosystems with Architectural Thinking
  24. A survey of empirical studies using transaction level data on exports and imports
  25. Governing Objects from a Distance
  26. An Outcome-Oriented, Social-Ecological Framework for Assessing Protected Area Effectiveness
  27. Aspect-oriented software development
  28. Web-Based Drills in Maths Using a Computer Algebra System