This example shows the results of an extensive effort to measure a wide range of social and economic outcomes of different investments in social programs, in this case by a private foundation, The Roberts Enterprise Development Fund. The analysis of returns on the Fund’s investment is based on impact-type questions. The Fund invests by making grants to nonprofit, community-based organizations in the San Francisco area for the purpose of "creating social value." The Fund refers to this approach as investment philanthropy:
"Investment Philanthropy ... is concerned with the value accrued as the result of charitable investments. Within this perspective, social returns (that is, benefits to society) generated by philanthropic investments are the measure of an investment’s success. The critical challenge in Investment Philanthropy is to compare the money invested with the value it creates.18 "
The Fund decided to evaluate the grants to nonprofit organizations on the basis of the social value created rather than on the goals of the grantee or the apparent merits of the organization’s efforts. To do so required the development of methods to define and measure that social value. Since many government programs provide funds for nonprofit organizations and the creation of similar concepts of social value is the goal of most government programs, the methods in this case can be instructive.
18 Roberts Enterprise Development Fund. SROI Methodology: Analyzing the Value of Social Purpose Enterprise Within a Social Return on Investment Framework. San Francisco: The Fund, 2001, p. 10.
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