Impact Measurement for non-profit @ Diffusion Pune 2012
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This document discusses impact measurement and calculating social return on investment (SROI). It provides an example of calculating SROI for a computer literacy program. The SROI indicates the social value created in financial terms. It outlines calculating inputs, outputs, outcomes and impacts. It then shows the yearly social benefits over 5 years discounted at 6% to get a total present value of the social return. The document also briefly mentions McKinsey & Company's 3 steps for designing a learning driven assessment plan and provides appendix links to resources on SROI.
Impact Measurement for non-profit @ Diffusion Pune 2012
- 1. Sponsored by Impact Measurement Rashmi Shekhar Sakshi Chadha
- 3. Social Return on Investment: a measure of Impact Social Return: The monetized impact, minus costs, of an intervention, program, organization, or company Social investors seek evidence of social impact (social return) that results from their financial investment They have many different profiles (i.e. philanthropist, venture capitalist, foundation or government) SROI indicates the value of the social impact in financial terms
- 4. Calculating SROI for Computer Literacy programme Input Outputs Outcomes Impacts INR 150,000 25 People trained in Direct 19 people gain long Direct 17 people gain long the programme term employment (increased term employment wages, reduced state benefits (deadweight accounted for) Paid) Indirect 15% reduction in Indirect 15% reduction in healthcare expenditure healthcare expenditures because of improved sanitation and health awareness
- 5. Calculating SROI for Computer Literacy programme Impact 17 clients Year 1 Year 2 Year 3 Year 4 Year 5 Per client(your student) benefit 5,000 7,000 9,000 12,000 14,000 Employment: to client Employment: to government 6,000 6,800 7,500 8,000 8,500 Reduced healthcare expenditures 12,000 12,000 12,000 12,000 12,000 Total social benefit 23,000 25,800 28,500 32,000 34,500 Your share (33% of total) 391,000 438,600 484,500 544,000 586,500 Present value (PV) of your share 129,030 144,738 159,885 179,520 193,545 (discounted @ 6%) Total PV of your share = 987,221 A 5-year timeframe is a standard time horizon to project return on investment Discount rate is the prevailing interest rate, normally 6% 8 % in India
- 6. McKinsey & Companys 3 steps to designing a Learning Driven Assessment Plan http://lsi.mckinsey.com/assets/dotcom/swf/flv/extranets/LSI/lda/lda.html
- 7. Appendix -I Nef www.neweconomics.org London Business Schools SROI Primer McKinsey & Company http://sso.mckinsey.com/socialimpact IRIS http://iris.thegiin.org/ PULSE http://www.app-x.com/products/pulse A link specifying which organization uses what kind of measures http://trasi.foundationcenter.org/browse_toolkit.php