How to Calculate the ROI of Online Communities

Not every organization building a community has a clear profit-motive in mind. Many non-profit organizations, for example, define value created by the community as anything that helps the organization to achieve its goals.

This might include:

1. Social Return on Investment. Social return is the unique improvement in the lives of the organization’s stakeholders as defined by its mission. This might mean increasing their capacity to handle their challenges, influencing public policy, or taking collective action. Social return is often referred to as the critical metric for all non-profit activities.
2. Capacity Building. Capacity building (or community capacity building) is increasing the group’s (or stakeholder’s) ability to handle their environment and achieve their goals. While this term is primarily used for international development, we believe it also applies to all stakeholders. For example, if an organization dedicated to supporting people suffering from cancer helps members feel happier, healthier, or more informed, this is a clear social return. An online community can be created precisely to provide stakeholders with access to better information, emotional support, or collective resources.

3. More informed decisions. An online community may improve the level of awareness or knowledge of a particular issue among its stakeholders. This sharing of knowledge would lead to beneficial impacts for their members. An online community dedicated to providing information about an illness might create a community to spread and share the best sources of information. This allows members to make more informed decisions about their treatment and health.
4. Social support. An online community may build a support network for victims of circumstance. This provides a place members can turn to for advice, help, and comfort. This may directly improve the happiness or life satisfaction levels of the organization’s members. It may help members in difficult situations.
5. Social Impact (SI). Social impact is the extent to which an online community has influenced the broader environment of stakeholders. This should be connected to a long-term change, not a short-term impact. For example, this might mean influencing public policy or collectively creating something of value (e.g. building a school). It might also mean stopping something bad from happening. This might occur through collective action such as fundraising, protests, or influencing key stakeholders.
6. Collective action. Collective action occurs when a group coordinates activities to achieve a social impact bigger than they could each achieve alone. An online community might help a group achieve the maximum possible impact. This might be through collecting signatures on a petition, staging protests, or crowdsourcing money or knowledge to achieve goals.
7. Eliciting donations and fundraising. An online community can increase the number of donations by allowing peer to peer fundraising, showing the social proof of other people donating, and setting targets that others can achieve. This is common through projects such as Kickstarter.