The development of society as a whole takes place continuously in all segments. Environment, social issues, local development, political power and governance, business, responsible business, social entrepreneurship - all these areas contribute to the development of society. The basic question that arises is what impact they have on society and its development, and more importantly how to come up with evidence that will substantiate that impact. The necessary data are obtained by various methods, measurements, tools that in most cases are not standardized. However, uniform measurement of such mostly non-financial information and their interpretation is necessary to be able to credibly answer the important question: "What difference do we create / what changes with our actions?"

Civil society organizations and social enterprises try to justify their actions to the public by measuring or evaluating their social impact, and other sectors are increasingly striving for this. To be able to determine, evaluate or measure the impact that an organization creates, it is necessary to start from the definition of impact - which, unfortunately, is not unique for now. Namely, the impact is defined and understood differently, depending on the category of users. In the Croatian context, the impact can be viewed as the overall activities of the organization from the economic-financial aspect, social aspect and environmental aspect, which arises from the implementation of the organization's activities.

The process of measuring impact has its sequence: a template is created, data is collected, then analyzed and interpreted, key information that is the subject of discussion is summarized. We use indicators in measuring or assessing the impact.

The indicators used are of a financial and non-financial nature (information on social and environmental impact). Financial information is found in financial statements, while non-financial information can be obtained in several ways. Today, recognizable tools and methods for measuring and reporting on social impact are Social Return on Investment (SROI), Social Accounting and Audit, Socially balanced scorecards and many others, where choosing the right tool and The methods to be used depending on the type of organization that wants to measure the social impact, the activity in which the organization is engaged, the size of the organization, etc.

The very issue of measuring and evaluating social impact is generally a complex concept and requires patience, time, experience, expertise and understanding of those who measure it, while at the same time understanding those to whom the evaluation is presented (users of such reports). The obtained evaluation and assessment can be an incentive and a reference by which organizations/companies will be able to "clearly justify" their actions to anyone who doubts the purpose of their actions.

A few years ago, the European Commission recognized the need to develop a methodology that would measure the socio-economic benefits generated by social enterprises. The Commission considers that the development of an unambiguous methodology for measuring the social impact of social enterprises on their impact on the community is crucial in proving that money invested in social enterprises contributes to high savings and income.

Therefore, in October 2012, a special group of experts, the so-called GECES (Expert Group on Social Entrepreneurship / Groupe d’Experts de la Commission sur l’Entrepreneuriat Social) whose task is to develop a methodology for measuring the social impact of social enterprise activities. The development of the methodology was necessary for two main reasons:

  • for the development of European Social Entrepreneurship Funds (EuSEFs) - to facilitate additional criteria for deciding where and why funds are invested,
  • in the context of the EU's Employment and Social Innovation Program (EaSI) - which grants certain grants to socially-owned enterprises that can prove that they are creating a measurable social impact.

Following this, the Government of the Republic of Croatia in April 2015 adopted the "Strategy for the Development of Social Entrepreneurship in the Republic of Croatia for the period from 2015 to 2020", intending to develop a business that connects business practices and values ​​of social responsibility, environmental protection and socio-economic performance measurements. Social entrepreneurship approaches existing social problems in a new way by implementing economic activities with an innovative combination of existing resources and creating not only economic but also social value.

In the context of this development, one of the activities is the development and application of a methodology for monitoring and evaluating the social, economic and environmental impact of social entrepreneurship, which should be implemented continuously until 2020, within which a methodology for monitoring and evaluating the effects of social entrepreneurship. Therefore, the ACT Group from Čakovec, in cooperation with the National Foundation for Civil Society Development, initiated the process of developing a methodology and establishing a system for monitoring, measuring and reporting on social impact.

Social Return on Investment (SROI)

One of the most well-known methods for measuring and reporting on social impact is Social Return on Investment (SROI). This method requires the interaction of the organization and its key stakeholders to gather data on the positive changes experienced by stakeholders. According to the ACT Group, which has developed a special methodology for measuring social impact adapted to the Croatian context, this method can be used to calculate how much social value was created by using available resources (capital, time, infrastructure) during the implementation of an activity. The resulting changes (social, economic and environmental effects) are assigned a monetary value that allows the calculation of the ratio of social return on investment, which tells how much kuna is earned for the company by investing 1.00 kn.

SROI elements