Tracking Social Return on Investment

The ability of entrepreneurs operating at the Bottom of the Pyramid to be leap from their current operating environment, which is weighed-down by the impact of the equilibrium of underdevelopment, requires the civic organizations that advocate the economic participation of these communities to be able to quantify and track the social return of investment achievable by potential funders. This necessitates the development of a social value metrics that is transparent and thus able to justify the sustainability of capital outlays to stakeholders of development funding. Thus, the social value metrics should guide the assessment of service innovations and investment decisions made by social venture capital market institutions (Mulgan: 2010).

Social impact tools are misaligned with standard market models for assessing value, as social benefits are public goods in their nature. Therefore, the non-rivalry component of public goods makes standard financial and economic accountability methods inappropriate for social value measurement. However, (Mulgan: 2010) suggests that “social value should be thought of as the product of the dynamic interaction between demand and supply in the evolution of markets for social value”. In light of what has been said about the effect of the concept of non-rivalry, Mulgan’s suggestion may be a challenging exploit without complete information on the impact of social actions.

In all fairness though, Mulgan does suggests that there should be cross sectoral collaboration in assessing and measuring the outcomes of resource allocations made in the interest of social benefit. Thus civic organizations should collaborate with government in terms of accessing important data depositories.

The Heritage Foundation (http://www.heritage.org) has developed an economic freedom index.

The index is constructed based on the conceptualization of what economic freedom is. The foundation defines economic freedom as “The fundamental right of every human to control his or her own labor and property... in an economically free society.” One of the indicators to their composite measures business freedom; “the ability to start, operate, and close a business that represents the overall burden of regulation as well as the efficiency of government in the regulatory process”. I should think, before discussing the how conflating the impact of the roles of accountability are for the performance reporting activity of civic organization, the priority should be measuring the access to economic participation. This should better inform whether, everyone is given the opportunity to be social entrepreneurs (Muhammad Yunus).