CATEGORIZATION OF SOCIAL VALUE CREATED WITHIN U.S. NONPROFIT ORGANIZATIONS: A CASE STUDY IN OREGON

摘要

Social value is impacted by the actions of organizations and government agencies. However, few track or forecast the social value impacts of these actions, making it difficult to effectively apply resources and document social gains. This is especially true in the third sector, composed of nonprofit organizations. Social return on investment (SROI) monetizes social benefits and costs associated with a project in an effort to counter this shortfall. By including SROI in a financial management plan, nonprofits are able to analyze strategies which maximize financial and social benefits. SROI is calculated as the quotient of present value of benefits and cost of an investment. In order to perform this calculation, social benefits must be defined, then converted into a dollar value. This is difficult because it requires an initial segregation of financial returns from social returns. Additionally, many current strategies monetize social impacts using perceived market prices which are largely imperfect. There are currently no guidelines for these calculations which results in inconsistent SROIs. This makes it difficult to interpret and compare SROIs within and between nonprofit organizations. This paper will provide a conceptual model for categorizing nonprofit organizations by the social value they create, followed by a discussion of future work for developing valuation techniques for monetizing the value created within each category, and the implications of SROI to engineering management profession in general.