How to Calculate the ROI of Online Communities

By Richard Millington

ROI People

Measuring Social Impact

In practice, many organizations combine social impact and social return (often under SROI – Social Return On Investment). This is a set of methodologies that value the impact on stakeholders by any given activity. The goal of this process is to calculate the extra-financial value created as a result of the activity.

This means translating outcomes to financial values. This can prove difficult (and collecting this data for many organizations can prove almost impossible). There is also a clear difference between measuring climate change and feeding local children in a local community.

Critically for social impact is the distinction between measuring outputs and measuring impacts. The former might measure how an intervention has increased the number of children who attend school each day. The latter might measure future employability levels. The former is an easily measurable output, the latter is an impact.

It is key to determine what the organization is trying to influence. This could be the effectiveness of money spent, efficiency of operations, the behavior change created, attitude change, confidence levels, etc.

While the methodology from the above does not differ greatly (identify the outcome to be measured, identify a method of measuring the outcome, compare with control group who were not exposed to the intervention, compare cost of each and identify a financial value), each methodology has to be carefully customized to the organization’s mission.

Typically, an organization will use surveys, anecdotal analysis, interviews, or direct analysis. These methodologies often adopt a Socratic approach. A hypothesis is made, an experiment (a community) is performed, and the observed impact is assessed.

We have included two of the most useful resources to measure social impact, as shown below:

 

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