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.

1. Sponsored by
Impact Measurement
Rashmi Shekhar
Sakshi Chadha

2. Impact Measurement is..
http://www.youtube.com/watch?v=NL3uiVeFV4Y

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 & Company’s
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 School’s 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