CBA vs SROI – Which Social Impact Methodology is Right for You?

When it comes to measuring social impact, two of the most widely used approaches are Cost-Benefit Analysis (CBA) and Social Return on Investment (SROI). While both aim to quantify the value created by social initiatives, they differ in methodology, focus, and practical use—particularly when it comes to decision-making and program evaluation.

At the Australian Social Value Bank (ASVB), we’re often asked how these methods compare and how our tools can support them. This guide will help you decide which approach works best for your goals.

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🔍 What is Cost-Benefit Analysis (CBA)?

CBA is the most established and widely endorsed method for measuring social value. It calculates a Benefit-Cost Ratio (BCR) by comparing the total monetised benefits of a program against its costs, offering a clear picture of whether an initiative creates a net positive impact on society.

Why choose CBA?

🔄 Forecast before you act: CBA can be used before a program is implemented (ex-ante or forecasting analysis), making it ideal for funding applications, business cases, and resource allocation decisions.

📊 Compare initiatives consistently: By expressing all costs and benefits—including non-market outcomes like wellbeing or environmental impact—in dollar terms, CBA allows for objective comparisons across different programs or policy areas.

💰 Demonstrate value for money: CBA supports the calculation of Benefit-Cost Ratio (BCR) and Net Present Value (NPV), both critical metrics for showing funders, boards, or governments that a program offers a positive return on investment.

🏛️ Meet government requirements: In places like New South Wales, a formal CBA is required for all business cases above certain financial thresholds, and is routinely used by government bodies like Treasury and Infrastructure departments.

🧠 Enhance transparency and rigour: CBA provides clear assumptions, evidence-based proxies, and standardised methodologies, ensuring consistency in decision-making—leading to better governance and public trust.

In short, CBA helps decision-makers prioritise programs that generate the greatest welfare gains, enabling evidence-based investments in what truly works. It’s the go-to methodology when public accountability and investment justification are essential.

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🤝 What is Social Return on Investment (SROI)?

SROI is an outcomes-based evaluation framework designed to help organisations understand, measure, and communicate the broader value they create. Like CBA, it uses a monetary lens to assess social outcomes—but it places a strong emphasis on stakeholder involvement and storytelling to provide a detailed picture of change.

Rather than comparing options or forecasting future benefits, SROI is typically used to evaluate the impact of a specific program after it has been delivered. This makes it ideal for organisations looking to assess the experiences and outcomes of their participants in depth.

Why choose SROI?

🧍‍♂️ Centres stakeholder experience: SROI places stakeholders at the heart of the evaluation, ensuring the voices of participants, staff, and community members are captured in defining what outcomes matter.

📈 Quantifies impact using proxy values: SROI applies financial proxies—often developed with stakeholder input—to assign value to non-financial outcomes like improved confidence, wellbeing, or social connection.

💬 Tells a compelling impact story: The narrative that emerges from an SROI is both qualitative and quantitative, helping organisations engage funders, boards, and communities by showcasing their social impact.

💡 Demonstrates change, not just value: By mapping a theory of change and capturing attribution, deadweight, and drop-off, SROI provides a structured way to understand how much of the observed change was directly caused by your intervention.

⚠️ Limitations of SROI: While valuable, SROI is not typically used to compare different initiatives and is not designed for pre-implementation forecasting. It also lacks the standardisation of CBA, as financial proxies can vary significantly depending on who develops them.

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🔧 How the ASVB Supports Both CBA and SROI

At ASVB, we make social impact measurement simple, credible, and consistent—whether you choose CBA or SROI. Our robust, evidence-based wellbeing values can support both methodologies, ensuring rigour, comparability, and credibility in your impact assessments.

Our wellbeing valuation dataset, the largest and most comprehensive in Australia, provides 83 outcome values across domains like health, housing, education, employment, crime reduction, social connection and community.

💡 Use ASVB in two powerful ways:

1. Run a complete CBA: Use the ASVB Social Value Calculator alongside our pre-defined indicators and data collection templates to conduct a streamlined CBA. This approach is ideal for programs focused on delivering outcomes that align with ASVB’s values, offering an efficient, government-aligned way to demonstrate value for money.

2. Strengthen your own CBA or SROI evaluation: If you’re running your own CBA or SROI evaluation, you can integrate ASVB’s wellbeing values at the point of monetising outcomes. This ensures greater rigour, comparability, and credibility—avoiding the need for custom financial proxies from small-scale surveys or assumptions.

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Why Use ASVB’s Wellbeing Values?

✅ Nationally derived using large datasets—ensuring rigour and statistical robustness
🔄 Consistent across projects, enabling comparison between initiatives and over time
🧠 Grounded in wellbeing economics, capturing true social value beyond just financial returns
⏱️ Saves time and resources by eliminating the need for primary research or proxy development
📈 Recognised by practitioners and funders as a credible source for impact monetisation

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🧭 Which Methodology Should You Use?

It depends on your goals:

• If you’re deciding where to invest or need to compare options, CBA is the gold standard—and often required for funding.

• If you’re evaluating a specific program’s impact with strong stakeholder involvement, SROI may be more suitable.

• For government grants or large-scale initiatives, CBA is not just recommended—it’s often mandatory.

ASVB gives you a practical, accessible way to meet these requirements with a simplified, government-aligned tool backed by robust methodology.

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🚀 Get Started with ASVB

Whether you’re forecasting outcomes for funding, evaluating an existing program, or exploring your social impact strategy, ASVB helps you measure what matters—with clarity and credibility.

📞 Contact us to discuss the best fit for your project
🎓 Join our next free webinar to see the ASVB in action

Let’s build a stronger case for social impact—together.

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