Public and third sector organisations are increasingly expected to demonstrate that their work improves people’s lives while also making responsible use of public money. As a result, approaches that attempt to measure social impact in a structured way have become more prominent. Two of the most discussed are WELLBYs (Wellbeing-Adjusted Life Years) and Social Return on Investment (SROI).
They are sometimes presented as competing methods. In practice, they address different parts of the same problem. Understanding how they relate to one another helps commissioners, funders and delivery organisations move beyond methodological debates and towards better decisions about what works.
What are WELLBYs?
WELLBYs aim to measure changes in wellbeing directly. A single WELLBY represents a one-point increase in subjective wellbeing, typically measured using validated life satisfaction scales, sustained for one year. The approach draws heavily on wellbeing economics and has gained attention through academic research and policy discussions around how governments should prioritise spending.
The appeal of WELLBYs lies in comparability. Because wellbeing becomes the common unit, it becomes possible to compare very different interventions on the same scale. Improvements in mental health, employment outcomes or social connection can all be considered in terms of their contribution to overall wellbeing. This creates a framework for asking which intervention produces the greatest improvement in people’s lives.
What is SROI?
Social Return on Investment is a framework for understanding the wider value created by an activity relative to the resources invested. It translates social, environmental and economic outcomes into monetary values and produces a ratio that expresses value created per pound spent.
SROI developed partly in response to the practical needs of decision-makers. Public bodies and funders operate within financial constraints, and monetary values allow social outcomes to be considered alongside costs in familiar terms. The framework also requires explicit consideration of factors such as deadweight, attribution and displacement, encouraging more realistic assessments of impact rather than headline claims.
Where WELLBYs focus on wellbeing as the outcome of interest, SROI provides a structured way of understanding how outcomes relate to investment decisions.
Why the methods sometimes appear to conflict
The perceived tension between WELLBYs and SROI largely arises from their different units of measurement. WELLBYs use wellbeing as the unit, while SROI uses money. This can create the impression that one approach is more “human” and the other more “financial”.
In reality, both approaches involve value judgements. WELLBYs assume that improvements in subjective wellbeing are the primary objective of policy. SROI assumes that outcomes need to be expressed in a way that allows comparison with costs and competing demands on budgets. These are not opposing assumptions. They reflect different perspectives on the same decision.
Another source of confusion comes from the belief that monetisation distances analysis from lived experience. Yet many SROI proxies, particularly those derived from wellbeing valuation techniques, already have their roots in wellbeing data. The distinction is therefore often less stark than it appears.
How WELLBYs and SROI complement each other
Each method answers a different question. WELLBYs help explain how much wellbeing change an intervention produces. SROI helps explain whether the outcomes achieved justify the investment required.
Used together, they strengthen interpretation in several ways. WELLBY analysis can provide a grounding for understanding which outcomes genuinely improve quality of life, helping avoid overemphasis on outputs or easily monetised outcomes. SROI can then translate those outcomes into a form that supports budgeting, commissioning and comparison across programmes.
There is also a technical relationship between the two approaches. Wellbeing valuation methods estimate the monetary equivalent of changes in wellbeing, meaning that many financial proxies used in SROI already reflect underlying wellbeing changes. In this sense, WELLBYs provide part of the theoretical foundation, while SROI provides the applied decision framework.
Practical use across public and third sector delivery
In practice, organisations rarely need to choose between approaches. A more useful starting point is to clarify what decision is being supported. When the aim is to understand which intervention most improves people’s lives, wellbeing measures offer clarity. When the aim is to decide how to allocate limited resources, monetised values help decision-makers compare options in a consistent wayallocate limited resources, monetised values help decision-makers compare options in a consistent way.
Collecting baseline wellbeing data alongside outcome indicators allows both perspectives to be explored. Producing cost-per-WELLBY estimates alongside SROI ratios can reveal whether an intervention delivers strong wellbeing gains but at a higher cost, or whether moderate wellbeing improvements are achieved efficiently across larger populations. This helps move discussions away from single headline numbers and towards informed trade-offs.
An additional benefit is distributional insight. Wellbeing measures can highlight who benefits most from an intervention, particularly where improvements are concentrated among groups experiencing lower baseline wellbeing. Monetary averages alone can sometimes obscure this effect.
Limitations and the importance of judgement
Neither approach removes the need for interpretation. WELLBYs depend on subjective measures that can vary across contexts and populations. SROI relies on valuation choices that must be transparent and proportionate to avoid overstating certaintyvaluation choices that must be transparent and proportionate to avoid overstating certainty. Both approaches are strongest when assumptions are explicit and sensitivity is tested.
The risk lies not in the methods themselves but in treating any single metric as definitive. Social value analysis is intended to inform judgement rather than replace it.
Conclusion
WELLBYs and SROI should be understood as complementary tools rather than competing methodologies. WELLBYs anchor analysis in changes to people’s wellbeing, while SROI translates outcomes into a form that supports real-world funding and commissioning decisions. Used together, they provide a more complete picture of value by connecting human outcomes with economic reality.
For public and third sector organisations, the most useful question is not which method is correct, but how both can contribute to clearer thinking about change, impact and the effective use of resourcesorganisations, the most useful question is not which method is correct, but how both can contribute to clearer thinking about change, impact and the effective use of resources.
