Identifying Problems and Quantifying Impact

            Templates for measuring the effectiveness of policies, products, and services are useful heuristics for evaluating whether or not they contribute to the creation of “social value.” However, there are a number of difficulties associated with the very process of measuring social value, let alone with the establishment of a metric capable of doing so. First, social value means different things to different people. In many fields of social action, people don’t agree on desired outcomes. Second, measures of social return on investment (SROI) often arbitrarily estimate costs and paybacks [1].

            A measure of social value is only meaningful relative to the scope of the problem it seeks to address. “Problems” and “solutions” have an inverse and mutually reinforcing relationship. We are constantly measuring the social costs associated with problems such as poverty, hunger, and disease. Emotional and statistics-based appeals regarding the severity of these costs are sometimes what spur wealthy philanthropists to back projects aimed at addressing them. During undergrad, I used this approach while co-organizing town hall events to discuss the disproportionate number of negative police interactions with minority students as compared to their white peers. Our attempt at creating a meaningful measure of the psychological trauma, academic distraction, and emotional haranguing associated with these interactions were successful in garnering funds from the administration for an outside investigation of campus police. Carefully measuring the “problem” before even implementing procedural changes allowed we as student organizers and the members of the administration to hold one another accountable over time, and also assess the “social value” created by the various policy changes.

If we can create metrics for the scope of various problems to prompt action, why can’t we as easily measure the social value generated by solutions to those problems? Perhaps it’s less about the metrics and more about the prevailing attitudes that condition people to be convinced of the nature of a problem by quantitative measures, but hesitant about the legitimacy of positive social impact by similar measures. This could be due to the negativity bias, or the notion that things of a more negative nature have a greater effect on one’s psychological processes than do neutral or positive things [2]. If the negativity bias has an effect on the formation of impressions, general evaluations, decision-making, and risk considerations, then an added element to the creation of SROIs or similar metrics of social value would be the importance of highlighting the potential for positive social impact given current levels of social cost. By anchoring descriptions of supply/demand dynamics that create social value over long periods of time in the constraints and severity levels of the related problem, social entrepreneurs might be able to make more convincing appeals to financial supporters. More importantly, metrics pertaining to the problem in conjunction with supply/demand evaluations might produce more meaningful measures of social value in the long term.  

On the other hand, might thorough evaluations of social value in relation the problems they seek to address deter financial supporters in their risk considerations and efficiency evaluations if the problems too large and the social value generated seems, by a comparison, a “drop in the bucket”?

[1] Mulgan, Geoff. (2010). Measuring Social Value. Stanford Social Innovation Review. http://ssir.org/articles/entry/measuring_social_value

[2] Baumeister, Roy F.; Finkenauer, Catrin; Vohs, Kathleen D. (2001). "Bad is stronger than good" Review of General Psychology (4): 323–370.