I am fascinated by the evolution of organizations. Moreover, right now, as it relates to Social Return on Investment (SROI), the for-profit and not-for profit sectors are in the midst of a significant evolutionary step. From diverse origins, with different cultures, and disparate clientele, both sectors have arrived at the same need for social asset management processes, and social return on investment measurement tools.

This is exciting because such tools and processes now exist and we are in the midst of propagating them to our clients.

We all know that the not-for-profit sector exists to create social value. Given that methodologies for measuring social value were basically non-existent in the past, we all accepted measuring not-for-profit organizations on intent, plans, and activity levels. However, increasing funding constraints, increasing management desire for informed decisions, and increasing awareness of the concepts of SROI, are changing all that. At SAM, we see a growing desire to find a better way, and excitement when organizations see SROI tools and practices.

We have also known that the for-profit sector has focused on creating shareholder value. These companies understand the means, necessity, and value of measurement. They have sophisticated and flexible financial measurement and reporting systems available to them in order to report to shareholders and other entities as required by law.

Yet, many such companies have also created community-based activities to give back, to increase their brand value, and to create a competitive advantage. In their world, measurement is a part of the fabric of management, and the demand for SROI measurement and related management disciplines is a strident call to action. We see that they want to create a higher value brand image based on supportable claims of achievement – and we also see their eagerness to use SROI tools and practices.

To sum up:

The not-for-profit sector wants to determine where to invest their people and financial resources for greatest social returns, increase internal satisfaction, and communicate convincingly with funding agencies.

The for-profit sector wants to create social benefit in the world, achieve improving financial performance, and. build a brand image.

Evolution will take place when both types of organizations find and implement the tools that can actually measure their Social Return on Investment, compare these against Social Benefit Targets, and take informed management decisions for go-forward activities to achieve continuous improvement of results.

It is our job to help them meet their SROI measurement and management needs, and play our role in the evolution of organizations.

Please comment so we can evolve this discussion.