Twelve SROI checks
A practical audit guide for defensible SROI. Short, usable, and culturally grounded, these checks help you design credible SROI, claim only your fair share of impact, and keep the numbers accountable.
Strong SROI rests on clear design, fair causal claims, and careful valuation. These checks help you hold space for context and culture (including whakapapa and tikanga), keep claims modest, and keep results repeatable and transparent. They are written for boards and executives who want defensible results, analysts and evaluators building SROI models, and funders and partners reviewing results. Read straight through to sharpen practice, dip into a specific check as a decision aid, or run a status audit (Applied / Partial / N/A) across all twelve and improve the weakest links.
Part A: Design and scope
1. Theory of Change
Begin with purpose, relationships and duties; make the logic testable. A solid SROI starts with a testable chain linking what you invest to the changes you expect, for whom, and why: inputs, activities, outcomes, long-term impact. State assumptions and risks, set outcome indicators with baselines and targets, name the time horizon, and be clear about who gains and who bears costs. Common failures: vague outcomes that are really outputs, no counterfactual thinking, unspecified beneficiaries, and nothing falsifiable.
2. Stakeholder mapping and inclusion
Start with the who, not the how much. Map participants, whānau, funders, partners, and taiao (the natural world), and document who was included and why. Gather stories as well as statistics, meet kanohi ki te kanohi (face to face) where it builds trust and nuance, and co-design metrics so stakeholders define what good looks like. An SROI is only as credible as the voices woven into it.
3. Materiality
Not every outcome belongs in the report. Decide what matters using two lenses: financial materiality (magnitude, likelihood, compliance and reputation) and kaupapa materiality (mana, tikanga, the mauri of taiao, equity for whānau, hapū and iwi, and intergenerational wellbeing). Score candidate topics against both lenses, prioritise the overlap, and document the boundary: what is in, what is out, and why. The common trap is measuring what is easy rather than what is valued.
4. Outcomes, not outputs
Outputs are what you deliver: workshops held, hours mentored, seedlings planted. Outcomes are what shifts in people, taiao and systems: sustained employment, increased participation in tikanga and te reo, improved water quality. Pick indicators from your material topics, define a baseline and direction of change, time-bound the window, triangulate evidence, and disaggregate where it matters. Avoid vanity metrics and one-off snapshots.
Part B: Causality and counterfactual
5. Attribution
Claim only your impact. What proportion of the change can your kaupapa fairly claim? Impact is usually shared between your work, partners, whānau effort, public services and wider context. Map contributors, gather evidence of contribution, allocate shares that sum to 100 percent, be conservative, and write down the rule you used so others can repeat it. Never assume 100 percent unless you have ruled out other causes, and count whānau effort as real contribution.
6. Deadweight
Subtract the inevitable. Deadweight is the share of change that would have happened anyway. Estimate it from baseline trends, comparator groups, published benchmarks, and informed judgement expressed as a range. Treat deadweight as your first subtraction, before attribution and displacement. Do not assume zero because the outcome feels unique, and do not apply one blanket percentage to everything.
7. Displacement
Same total, new split. Displacement is when measured gains are reallocated from elsewhere rather than created anew: hiring in a static labour market, contract wins inside a fixed budget, capped training seats. Check whether the total pool is fixed over your window, decompose the uplift into net new and displaced, and report both. Assuming zero displacement in fixed-capacity contexts is a common way to over-claim.
8. Duration and drop-off
Year-one gains make good headlines, but how long do they last? Duration is how many years an outcome continues; drop-off is how much it declines each year. Track cohorts at regular intervals, look for retention signals, benchmark against published persistence data, and define a clear endpoint: stop counting when the outcome plausibly returns to baseline. Apply the annual drop-off rate each year, keeping only the retained portion.
Part C: Valuation and reporting
9. Discounting
Future benefits are not worth the same as benefits received today. Discounting converts future costs and outcomes into present value so options are comparable. Default to the New Zealand Treasury social discount rate, or a clearly justified iwi-defined rate that reflects intergenerational horizons, with documented rationale and governance sign-off. Publish low, central and high cases so readers can see how much the rate drives the result.
10. Monetisation and valuation sources
Value beyond price. Many outcomes that matter carry no market price: connection, safety, ecological integrity, cultural access. Use credible proxies with documented sources and base years, express figures in real terms, publish ranges where evidence is thin, avoid double counting across domains, and record the governance process behind any culturally specific values. Transparency and fit matter more than elegance.
11. Headline results: NPV and the SROI ratio
Report Net Present Value and the SROI ratio together, with context. NPV is discounted benefits minus discounted costs; the ratio is dollars of value per dollar invested. Show ranges and a payback year, disaggregate by stakeholder and domain, and be explicit about what is excluded: outcomes not monetised, negative externalities. Ratios are a headline, not a verdict; they help prioritise but do not capture distribution, risk, or cultural weight.
12. Sensitivity, transparency and assurance
Show what moves the result and make the work auditable. Vary the discount rate, duration and drop-off, deadweight, and attribution one at a time; rank assumptions by their effect on the result; and document the rationale behind each adjustment. Include an assumption table with sources, a stated price base year, and a brief statement on assurance procedures, double-counting checks, and stakeholder validation.
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