Caring, With Cost Benefits
Your 'Eureka' Moment...
Eureka!’ Supposedly, that was the exclamation of Greek notable Euripides, when he suddenly realized the answer to a pressing scientific question whilst lowering himself into a bath. The genius revelation: that he could measure his own volume (weight), by how much water he displaced…which meant the same theory would work for weighing gold. Modern analytic theory has realized that a similar ‘Eureka’ can be achieved by reversing the process - how does an overall value decrease when you take OUT a certain specific thing…like say, Charity?
The much-abbreviated name for that equation is SROI. Just like any for-profit business enterprise wants to be able to point to its Return on Investment, non-profit organizations wanted to be able to point to an easy-to-understand way of explaining the benefit of exactly what they supplied to the community. Enter ‘Social Return on Investment’...which we will definitely shorten to SROI from hereon in. There is a standard mathematical equation, with items like ‘Inputs’, ‘Outputs’, ‘Outcomes’ (that better life we described), and ‘Impact’ (guesstimating the net benefit - how many recipients of the charity would have statistically been alright, even without the help?)
The thumbnail explanation of SROI is more accessible than a formula on a chalkboard. ‘Charity A’ was created to tackle a specific problem. How much does that particular problem cost society? We can easily imagine all the good provided by a shelter for women and children escaping abusive relationships. SROI amplifies the achievements of Charity A’s shelter by calculating the dollars society saves by not having to shoulder the costs of not providing shelter. Where else would they have lived, and who would have paid for that? What’s the cost of those children eventually dropping out of school, and the mother not being able to step back into the work-force, and be a contributing tax-payer?
Even with the best of intentions, it would be unreasonable not to anticipate some ‘charity fatigue’ occurring in the public at large, especially at stressful times (like say, during the third year of a pandemic). Social Return on Investment is an excellent additional argument for support, because it provides a new, fresh lens for potential donors to grasp just how much they could be helping. In a way, we all find it a lot easier to focus on a binary choice.
To put in a very basic analogy, suppose you’re told you need to spend…a thousand dollars on house repairs. Instinctively, you’re immediately thinking you really don’t want to, that’s not fair after I already spent x dollars on another repair, etc., etc. Now, instead you hear, you have a choice. You have the opportunity to invest a thousand dollars now, and do this specific maintenance work. OR, you can spend eight thousand dollars in a year, because of the very predictable outcomes that came out of your choosing to not act. Stories and pictures can help to motivate hearts; SROI can appeal for compassion and charity, on a rational level. (There’s a reason the phrase ‘the bottom line’ refers to both accounting and facing life’s more challenging realities.) As well, being able to demonstrate to donors that your non-profit understands how to manage money and gauge the effectiveness of its own work is an invaluable sales tool in attracting new donors. Get THEM to say ‘Eureka’.
However you want to make a difference, Link Charity helps you make the MOST difference. Since 1998, we have been assisting individuals and charities to maximize their best intentions into tangible results, whether it’s through a charitable annuity, a gift of securities, or any number of Gifting Options. At Link Charity, helping you make a better world is OUR Bottom Line. Contact us today.
