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Using cost-benefit analysis and social return on investment to evaluate the impact of social enterprise: Promises, implementation, and limitations

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  • Cordes, Joseph J.

Abstract

Since the early 2000’s there has been growing interest in using the Social Return on Investment (SROI) as a measure for assessing the performance of social enterprises. By analogy with its business counterpart, the Return on Investment (ROI), the SROI is a metric that compares the monetized social costs of a program with the monetized social benefits of achieving an outcome (or set of outcomes). For example, calculating the SROI of a nonprofit half-way house for drug addicts might involve estimating the reduced social costs attributable to successful rehabilitation of addicts, and comparing this to the social costs of operating the half-way house. Alternatively, the total return of a for-profit social enterprise providing affordable housing might consist both of the traditional private return on investment along with the economic value of meeting the housing needs of lower income households.

Suggested Citation

  • Cordes, Joseph J., 2017. "Using cost-benefit analysis and social return on investment to evaluate the impact of social enterprise: Promises, implementation, and limitations," Evaluation and Program Planning, Elsevier, vol. 64(C), pages 98-104.
    • Handle: RePEc:eee:epplan:v:64:y:2017:i:c:p:98-104
    DOI: 10.1016/j.evalprogplan.2016.11.008
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    References listed on IDEAS

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    1. Lynn A. Karoly, 2011. "Toward Standardization of Benefit-Cost Analyses of Early Childhood Interventions," Working Papers 823, RAND Corporation.
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    Cited by:

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    2. Peterson, Christina & Skolits, Gary, 2020. "Value for money: A utilization-focused approach to extending the foundation and contribution of economic evaluation," Evaluation and Program Planning, Elsevier, vol. 80(C).
    3. Darie Casiana Maria, 2023. "The Link between Business Benefits and ERP Systems: A Bibliometric Analysis," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 17(1), pages 1957-1966, July.
    4. Guang Zhu & Hu Liu & Mining Feng, 2018. "An Evolutionary Game-Theoretic Approach for Assessing Privacy Protection in mHealth Systems," IJERPH, MDPI, vol. 15(10), pages 1-27, October.
    5. Ching Yin Ip & Chaoyun Liang, 2023. "Would customers of social enterprises become social entrepreneurs?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1454-1464, April.
    6. Theo Benos & Nikos Kalogeras & Martin Wetzels & Ko De Ruyter & Joost M. E. Pennings, 2018. "Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study," Sustainability, MDPI, vol. 10(12), pages 1-38, December.
    7. Iluminada Fuertes-Fuertes & J. David Cabedo & Inmaculada Jimeno-García, 2019. "Capturing the Invisible Wealth in Nonprofits to Overcome Myopic Perceptions," Sustainability, MDPI, vol. 12(1), pages 1-18, December.
    8. Francesco Basset, 2023. "The Evaluation of Social Farming through Social Return on Investment: A Review," Sustainability, MDPI, vol. 15(4), pages 1-14, February.
    9. Szijarto, Barbara & Milley, Peter & Svensson, Kate & Cousins, J. Bradley, 2018. "On the evaluation of social innovations and social enterprises: Recognizing and integrating two solitudes in the empirical knowledge base," Evaluation and Program Planning, Elsevier, vol. 66(C), pages 20-32.
    10. Cam-Duc Au & Lars Klingenberger & Martin Svoboda & Eric Frère, 2021. "Business Model of Sustainable Robo-Advisors: Empirical Insights for Practical Implementation," Sustainability, MDPI, vol. 13(23), pages 1-12, November.
    11. Domenech, John & Eveleigh, Timothy & Tanju, Bereket, 2018. "Marine Hydrokinetic (MHK) systems: Using systems thinking in resource characterization and estimating costs for the practical harvest of electricity from tidal currents," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 723-730.
    12. Osama Abied & Othman Ibrahim & Siti Nuur-Ila Mat Kamal & Ibrahim M. Alfadli & Weam M. Binjumah & Norafida Ithnin & Maged Nasser, 2022. "Probing Determinants Affecting Intention to Adopt Cloud Technology in E-Government Systems," Sustainability, MDPI, vol. 14(23), pages 1-29, November.
    13. Swarnali Sharma & Morgan E Smith & James Reimer & David B O’Brien & Jean M Brissau & Marie C Donahue & Clarence E Carter & Edwin Michael, 2019. "Economic performance and cost-effectiveness of using a DEC-salt social enterprise for eliminating the major neglected tropical disease, lymphatic filariasis," PLOS Neglected Tropical Diseases, Public Library of Science, vol. 13(7), pages 1-19, July.
    14. Secco, Laura & Pisani, Elena & Da Re, Riccardo & Rogelja, Todora & Burlando, Catie & Vicentini, Kamini & Pettenella, Davide & Masiero, Mauro & Miller, David & Nijnjk, Maria, 2019. "Towards a method of evaluating social innovation in forest-dependent rural communities: First suggestions from a science-stakeholder collaboration," Forest Policy and Economics, Elsevier, vol. 104(C), pages 9-22.
    15. Antoni F. Tulla & Ana Vera & Carles Guirado & Natàlia Valldeperas, 2020. "The Return on Investment in Social Farming: A Strategy for Sustainable Rural Development in Rural Catalonia," Sustainability, MDPI, vol. 12(11), pages 1-28, June.
    16. Kemi Adeyeye & John Gallagher & Helena M. Ramos & Aonghus McNabola, 2022. "The Social Return Potential of Micro Hydropower in Water Networks Based on Demonstrator Examples," Energies, MDPI, vol. 15(18), pages 1-21, September.

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