Social Return on Investment in UK Community Project Feasibility Studies

In the landscape of public funding and community development, the need to demonstrate value that extends beyond financial profit has never been more urgent. Across the United Kingdom, community projects—ranging from affordable housing initiatives and youth engagement programmes to local enterprise hubs—are increasingly assessed not just for economic viability, but also for their broader impact on social wellbeing.

This is where Social Return on Investment (SROI) comes into play, offering a framework for measuring the value of community projects in terms of the social, environmental, and economic outcomes they generate.

SROI is particularly valuable during the early stages of project development, including feasibility studies. In recent years, feasibility study companies have started to incorporate SROI as a core metric when evaluating whether community initiatives are worth pursuing. This shift acknowledges that traditional cost-benefit analysis often misses the full scope of impact, especially when the benefits are diffuse, long-term, or non-monetary in nature.

What Is Social Return on Investment (SROI)?

Social Return on Investment is a methodology that assigns a monetary value to the social, environmental, and economic benefits generated by a project. Developed originally by non-profits and social enterprises, SROI has now been adopted by public sector bodies, grant funders, and local authorities throughout the UK.

At its core, SROI seeks to answer the question: “For every pound invested, what is the broader value created for society?” A well-conducted SROI analysis might reveal, for example, that a £500,000 investment in a youth training programme results in £1.5 million in long-term value—through reduced crime, improved employment rates, and better mental health outcomes.

The Role of SROI in Community Feasibility Studies

Feasibility studies help stakeholders determine whether a proposed project is viable, desirable, and aligned with strategic objectives. For community initiatives, these studies go far beyond construction costs or financial sustainability. They must assess whether the project will positively impact local residents, support disadvantaged groups, and contribute to long-term resilience.

Integrating SROI into a feasibility study ensures that:

The project’s social impact is clearly articulated.

Stakeholders understand the full range of benefits.

Investment decisions are based on evidence, not assumptions.

Funders have tangible data to justify support.

This is especially crucial in a climate where public funding is limited, and competition for grants is high. Demonstrating a strong SROI can tip the balance in favour of one project over another.

Key Steps in SROI Analysis

Conducting an SROI analysis involves several structured steps that can be aligned with the feasibility study process:

Identify Stakeholders
The first step is to identify who will be affected by the project. This includes direct beneficiaries (e.g., residents or service users), local authorities, healthcare providers, schools, and other community institutions.

Map Outcomes
Analysts map out the anticipated changes resulting from the project. For example, a community garden might lead to increased food security, reduced loneliness, and enhanced biodiversity.

Assign Values to Outcomes
Using financial proxies, each outcome is assigned a value. For instance, improved mental health might be linked to reduced NHS costs, while reduced anti-social behaviour might be valued based on policing cost savings.

Establish Impact
The analysis must isolate the impact of the project itself—subtracting outcomes that would have occurred anyway (deadweight) or that are due to other interventions (attribution).

Calculate the SROI Ratio
Finally, the total value created is divided by the total investment to yield a ratio (e.g., £4 of social value for every £1 invested).

Integrating SROI into Funding Applications

Community project funders increasingly demand evidence of social value. Organisations like the National Lottery Community Fund, local councils, and charitable trusts look favourably on applications that include clear, quantifiable social returns. Including an SROI analysis in a feasibility study positions the project as both thoughtful and impact-oriented.

Moreover, some local governments are aligning their procurement processes with the Social Value Act, giving priority to projects that offer measurable community benefits. A well-prepared feasibility study with SROI included can help meet these criteria.

The Role of Real Estate and Built Environment

Many community projects involve the development or repurposing of physical spaces—youth centres, co-working hubs, parks, or affordable housing. Here, real estate advisors play a critical role in feasibility studies by:

Conducting site assessments.

Estimating property acquisition and redevelopment costs.

Ensuring compliance with planning policies.

Advising on the best use of land to maximise community impact.

Their input ensures that the physical aspects of a community project are financially feasible and suitable for the intended social outcomes. When integrated with SROI findings, the feasibility study becomes a holistic document that marries physical practicality with societal value.

Challenges and Limitations

While SROI offers a powerful framework, it is not without limitations:

Assigning monetary values to intangible benefits can be subjective.

Data collection can be time-consuming and costly.

Outcomes are not always immediate or directly attributable to the project.

Nevertheless, when done rigorously, SROI enhances the credibility of a feasibility study and provides a meaningful way to communicate impact to funders, policymakers, and the public.

As the UK continues to invest in inclusive, community-led regeneration, the role of Social Return on Investment in project feasibility studies becomes increasingly important. SROI allows stakeholders to see beyond budgets and construction timelines, focusing instead on how a project can transform lives and build stronger communities.

For local councils, non-profits, and grassroots organisations, working with expert feasibility study companies and engaging real estate advisors ensures that both the physical and social aspects of a project are properly evaluated. In an era where public accountability, sustainability, and equity are paramount, SROI is not just a tool—it’s an essential part of building a more resilient, just, and compassionate society.

Related Topics:

Environmental Impact Assessments in UK Feasibility Studies: Legal Requirements
Economic Feasibility Analysis for UK Small and Medium Enterprises
Operational Feasibility Considerations for UK Manufacturing Ventures
UK Healthcare Project Feasibility Studies: NHS Considerations
Transport Infrastructure Feasibility Studies: UK Planning Process