I am a native New Yorker, but I have been traveling through Asia for the past 2 years. My hope is to start a comic book company and telecommuting recruitment agency for e-jobs in Manila.
And, to develop a social return on investment as much as profit.
It’s a complicated process that I am just beginning. However, as a Westerner and as an American, I cannot just come to a developing country to make money without giving back.
Also, I need to give back to my adopted community in a way that is quantifiable, analytical, and provable via data. A social return on investment benefits a business, community, and environment.
The Philippines is bustling with opportunities for call center and telecommuting work opportunities. In decades to come, more opportunities will arise.
What is important, especially for businesses operating for profit in developing countries, is to verify how every dollar invested manifests a social return that improves and enables the lives of the locals and their community.
It isn’t just enough for a business to set up shop in a neighborhood or foreign country. They should give back as much, or more, than they take in, business-wise. (In a fair world anyway.)
This is a standard practice in the United States for many businesses and organization too.
As I offer you a detailed definition of a social return on investment, I will also include a real-life example from an organization in this country.
Also, I will end on some thoughts about how such business initiatives affect you and your community whether you know it or not.
What is a Social Return on Investment?
When considering traditional business models, a return on investment, or ROI, is the money that you gain or lose in relation to the money you invest in some business endeavor.
A social return on investment is a business plan metric that measures how monetary value, and explicitly, quantifiable social value is generated via implemented community services.
Social return on investment is a concept that originated in Europe but is becoming popular in the United States. This concept has existed in some form since the 1960s.
Social Return on Investment Specifics
Such business initiatives are predicated on public accountability and publicly affirming how business investments benefits the community it operates in.
This is about creating better executive and forecast analysis about the financial social value created by investment. And then, adjusting accordingly.
What kind of information must be quantified in an SROI, unlike an ROI? Well, imagine a business or organization is employing local students for summer jobs, providing job training for local residents, or similar endeavors.
What are the costs of initiating these programs? How many people will benefit from the program? How will it improve the lives of locals?
SROI Example and Community Effect
Second Harvest Food Bank of Central Florida is a food bank in Orlando, Florida dedicated to eradicating food insecurity.
In 2017, they initiated a program designed to help 700,000 who struggle with food insecurity.
As per the findings of Second Harvest’s SROI impact repor
- Second Harvest distributed $135 million in food aid
- Initiative help local community generate $14.5 million in additional S.N.A.P. funds
- Donors saved $19 million in taxes
- Over 52,500 tons of food saved from waste
- Almost 30,000 volunteers donated the equivalent of $2 million in work hours
- Graduates of the Second Harvest Culinary Training Program have earned collective salaries of $1.8 million
- Every $1 invested in Second Harvest produces $13.06 in SROI, or a 1,306% SROI
How does this affect you? It’s important to know what benefits for-profit and non-profits bring into your community if they operate there.
Do you know the SROI of the local businesses and organizations in your neighborhood?
Additionally, if you plan to open a business in your community you now have a blueprint to help responsibly give back.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.