Impact Measurement Problems, Misconceptions, and Challenges in Development Projects: Social Return on Investment
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Abstract
Social Return on Investment (SROI) offers many benefits. However, to accurately assess the social outcomes of development projects or activities undertaken by civil society organizations, social enterprises, or the corporate social responsibility (CSR) units of private companies and government agencies, it is essential to consider the conditions and limitations of the SROI approach. This article synthesizes common problems, misconceptions, and challenges in the practice of social impact assessment. The findings indicate that the use of SROI to promote business and political propaganda, the divergence from original project objectives, and tensions between evaluation goals and regulatory compliance have become significant barriers to its ethical and appropriate application. Challenges in SROI analysis include identifying suitable financial proxies; engaging all relevant stakeholders; managing budgetary and time constraints; considering deadweight effects; and conducting evaluations with control groups (randomized controlled trials). The findings suggest evaluators should use SROI to improve operational efficiency rather than focus exclusively on favorable outcomes. Development projects suitable for SROI assessment of short-term social impact typically have clearly defined objectives and well-identified target groups.
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