According to a report from the Third Sector Research Centre (TSRC), voluntary organisations using the Social Return on Investment (SROI) model can too easily inflate the results to make their work look good. SROI is also often being used to compare the results of work between organisations, despite the fact that the results are subjective and unique to each body.

SROI is just one method designed to measure the impact of the work of voluntary organisations, however, it has received particular attention and has been promoted by some third sector organisations, public and private bodies.

It involves attributing a financial value to inputs and outcomes, and calculating these as a ratio, so if the SROI is 3:1, it means that every pound invested in the organisation generates a social value worth three pounds. The report notes that, while aiming for rigour, the method leaves a great deal of space for personal judgment. This makes it possible to inflate the value created and may also lead to misunderstandings about how to interpret the SROI ratio.

Although auditing tools and procedures to help standardise the way SROI is calculated have been developed, attention needs to be paid to how the results of SROI are used. The report said that using it as a comparative tool for organisations competing for contracts and funding, is risking the reputation of the method.