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Abstract The government needs quantitative indexes to evaluate the effectiveness of the Venture Philanthropy Program, which finances the non-government organizations to run the socially valuable projects where the public demands have not been satisfied. We revise the SROI (Social Return on Investment), a method originally developed from the Stakeholder Theory, by offering six core indexes ″Operation Value, Social Value, Blended Value, Rate of Operation Return, Rate of Social Return, Rate of Blended Return″ through the course of ″Input-Activity-Output-Outcome″, in order to strengthen the objectiveness of the evaluation and enrich the existing indexes. We then employ the revised SROI indexes to evaluate two cases financed by the Venture Philanthropy Program , one is ″the Migrant Workers' Kids Education Aid Program″ and the other is ″Work Integration Program for the Mentally Disabled″, through the steps including: (1) establishing a detailed name-list of the relevant stakeholders; (2) ensuring the benefits generated from the program; (3) identifying a group of measurable indexes; (4) deducing the ″loading effects″ and ″substitution effects″; (5) calculating the core six indexes, and (6) communicating the results with the stakeholders and subject matter experts. The findings shed light on the fact that the revised SROI is able to systematically observe the interests of beneficiaries and objectively evaluate the performance of the project by generating a group of comparable indexes. Additionally, the revised SROI may better the understanding of the sustainability of the non-government organizations and the real needs of the beneficiaries, which in turn, help the government to further realize the unmet public welfare and the extra resource to be leveraged. The challenges and strategies of using the modified SROI are further discussed. First, selecting the indexes from the complex context where the stakeholder's daedal interest is hard to distinguish and measure. Second, generalizing the evidence from numerous data is a tough task, especially when the sample's representativeness is questionable. Third, calculating the loading effects and substitution effects which are difficult to measure is not simple. In summary, it is necessary to deeply look into the projects before using SROI. Furthermore, we find that the project performance is impacted by the NGO's relationship with the government, the clarity of the project goal and the vulnerability of the beneficiaries. Thus, we suggest that the government maximize the utility of financial resource in terms of SROI. Besides, the government should not only differentiate the non-government organizations by measuring SROI of the project they are working on, but also measure and archive the SROI indexes of the venture philanthropy projects.
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