socially marketing

When looking at the impact of a non-profit project, we typically talk about outputs and outcomes.  The difference between the two is a matter of scale: outputs are relatively short-term and small-scope; outcomes are longer-term and larger-scope.  Outputs, over time, help pave the way for outcomes.

Impact metrics like SROI (Social Return on Investment) are easier to manage with impacts that are easily quantified.  Outputs are more likely than outcomes to be expressed in neat countable units, which makes them an appealing starting point for calculating SROI.

Consider the large and growing number of environmental groups focusing on climate change.  Their energy conservation efforts can legitimately claim “a healthy and sustainable planet” as an outcome.  Such an outcome is clearly and immensely valuable, but challenging to nail down to a dollar figure.

Now consider a short-term output of those same conservation efforts: reduced CO₂ (carbon dioxide) emissions.  This is an easy result to quantify.  Even better for socialmarkets, it’s easy to monetize: financial markets have been pricing CO₂ for years now.

According to the ECX exchange, CO₂ is currently trading at roughly €14 per metric ton.  An output that saves 100 metric tons of CO₂ emissions has a related market value of around €1400, which is a good starting point for calculating SROI.

I say starting point, because the SROI of a project is rarely is simple as the market value of one particular output.  There can be many outputs, with many related outcomes.  In any case, there are questions to complicate even the simplest of impact metrics:

• How do we allocate the SROI of one outcome across many contributing agencies?
• Should we discount the SROI of an outcome over the time it takes to produce it?
• How does SROI account for the risk associated with a project falling short of its stated goals?
• Is the impact of not producing a negative output, e.g. a ton of CO₂, the same as producing a positive output, e.g. a gallon of fresh water?

We are a long way from having good answers to these questions, but countable outputs (like tons of CO₂) is one promising shortcut.  Here are some other volume-based outputs we find intriguing, especially if we can find a reasonable estimate of the corresponding social benefit per unit:

• Number of nutritious meals served at a soup kitchen
• Number of students obtaining a higher level of education
• Increase in fish population from a river clean-up

Because the fungibility of such data is good for SROI calculations, we are including projects with outputs like this in the set of listings for our beta release.  They should make an interesting testbed for examining if and how easily quantified outputs translate into better calculations of SROI.