Measuring the social impact of building low-cost housing, child-care centers, and health clinics in poor neighborhoods isn’t easy. But a new online tool takes a stab at putting a dollar value on such building projects, based on the best available social-science research.
The Social Impact Calculator is the result of the Low Income Investment Fund’s effort to measure the effect of its own work.
The fund couldn’t afford to do long-term studies on the people whose lives have been touched by the apartment buildings, schools, and clinics it finances. So the group sought out high-quality research that allows it to estimate a monetary value, says Nancy O. Andrews, chief executive of the Low Income Investment Fund.
For example, she says, the fund uses research conducted by James Heckman, a Nobel Prize-winning economist, to put a dollar value on its work financing early-education centers.
The fund created the calculator to make it easy for other organizations to use its approach in valuing their own building projects.
While anyone can use the calculator, Ms. Andrews thinks other community finance organizations, impact investors, foundations, and banks that finance community-reinvestment projects are most likely to find it helpful.
The calculator is open source, so other organizations can modify the tool.
"We’re not trying to tell everyone that this is the right way to do it," says Ms. Andrews. "We’re really putting it out as a version one."
She says that if other people improve the calculator or figure out a better way to measure the social value of building projects, the Low Income Investment Fund would consider that a big success.
Says Ms. Andrews: "More than anything, we’d love this to spark a conversation."