At VillageReach, we are evaluating different methodologies to formulate our approach to quantify and present the value of a social investment. We are considering two methods: a BACO Calculation (for best available charitable option – created by the Acumen Fund) and an SROI calculation. The BACO model enables us to perform a cost-effective analysis on philanthropic dollars by comparing two options: a charity donation vs. an investment in a business. This analysis provides us with decision-making data to assess and determine the return the greatest social impact at lowest cost. The SROI (“social return on investment”) methodology has been in development for many years, and calculated using a discounted cash flow analysis + projected socio-economic contributions (direct, demonstrable cost savings and revenue contribution that are associated with the social purpose enterprise) into a projected blended business performance. There are distinct challenges with both of these approaches as it is difficult to often find a “comparable” charity donation and quantify the context of social outcomes. However, we strive to build quantifiable metrics that will help continuously evaluate our investments and allow us to communicate our impact to an external audience. Let us know what steps you are taking or thoughts about this process as this is clearly a shared effort.

At VillageReach we focus on energy, transport/logistics and communications, the “Enabling Services” that are required to fulfill the mission of VillageReach programs. When implementing health care programs in regions with weak or nonexistent Enabling Services, NGO’s have traditionally elected to handle the provisioning of Enabling Services internally. Trucking in generators, fuel and other supplies directly supports the program objectives but it does little to provide Enabling Services to the surrounding community. It is widely recognized that a successful and sustainable program intervention creates and uses local capacity. The VillageReach model and programs to date have as a guiding principle the creation of local capacity not only for last mile health care infrastructure but also for the Enabling Services that support that infrastructure.

To sustain the improvement in health and decrease in mortality that is the core of the VillageReach mission it is necessary to create permanent health care resources in last mile communities. Sustainability requires that Enabling Services be available, be reliable and can be procured at affordable rates for the long term. In order for Enabling Services to be available for the long term the customer base must be substantially larger than just the rural health care clinic and therefore must include a vibrant market in the local community. The lack of Enabling Services in many of these rural situations clearly shows that sufficient market demand does not exist today for a viable commercial business. It’s a classic chicken and egg problem – VillageReach is moving forward as a catalyst with creating basic demand for Enabling Services as part of its programs to support last mile health care and incubating the required commercial business for the services.

So, why is social enterprise required in the VillageReach model? Because without established Enabling Services as one of the key elements in the intervention – the VillageReach programs would not achieve the required sustainability and would become yet another solution that fails to provide the long term impact when transitioned to local operation.