Enter the tangible and intangible value to the community ($), your investment costs (money spent plus the monetized value of time), into the SROI Calculator. The calculator will evaluate the SROI.
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SROI Formula
The following formula is used to calculate the SROI. SROI is commonly expressed as a ratio of social value created (in dollars) per dollar invested. If you want to include time in the investment, it should be converted to a dollar cost (for example, time × labor rate).
\begin{aligned}
SROI &= \frac{TV + ITV}{M + TC}\\
TC &= T \times R
\end{aligned}Variables:
- SROI is the social return on investment ratio (social value created per dollar invested)
- TV is the tangible value to the community ($)
- ITV is the intangible value to the community ($), expressed in monetary terms
- M is the total amount of money spent ($)
- TC is the monetized time/labor cost ($)
- T is the total time invested (hours, or workdays if you convert days to hours)
- R is the labor rate ($ per hour)
To calculate a social return on investment, add together the tangible and intangible value added to the community, then divide by the total investment cost. Total investment cost is typically the money spent plus any monetized value of time/labor.
How to Calculate SROI?
The following steps outline how to calculate the SROI.
- First, determine the tangible value to the community (TV) and the intangible value to the community (ITV), and express both in dollars ($).
- Next, determine the total amount of money spent (M) ($).
- If including time in the investment, determine the total time invested (T) and the labor rate (R), then calculate the monetized time cost: TC = T × R.
- Next, gather the formula from above: SROI = (TV + ITV) / (M + TC).
- Finally, calculate the SROI.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem:
Use the following variables as an example problem to test your knowledge.
tangible and intangible value to the community ($) = 50,000
total time invested = 3 days (assume 8-hour workdays)
labor rate ($/hour) = 25
total amount of money spent ($) = 20,000
SROI = (TV + ITV) / (M + TC) = 50,000 / (20,000 + (3 × 8 × 25)) = 50,000 / 20,600 = 2.4272
