Essays on People, Place & Purpose

Investing in What Works for America's Communities

The LIIF Social Impact Calculator: A New Approach to Measuring Impact

by Admin

By Nancy O. Andrews and Dan Rinzler

Today, the Low Income Investment Fund (LIIF) announces the launch of its Social Impact Calculator, a first-of-its-kind tool that allows us to monetize—or put a dollar amount on—the social impact of our investments in low-income communities. For LIIF, it’s a new way to assess how well we are achieving our mission of poverty alleviation.

The ability to measure results has become increasingly important for the field of community development. LIIF and other organizations in the sector must be able to effectively communicate the value of our work in order to unlock new sources of capital, form new partnerships—such as with health institutions and transit agencies—and channel public and private investment to the most impactful strategies.

We limited the calculator to indicators that are central to our mission of poverty alleviation, and which relate to our program areas of affordable housing, early care and education, K-12 education, health, and equitable transit-oriented development. But we also developed an online platform to “open source” the tool so that anyone can try it out, learn about its methodology, and offer feedback.

How does the social impact calculator work?
Estimating social return is an emerging area with several potential approaches. The Social Impact Calculator uses an “impact-by-proxy” approach, leveraging social science research to translate easily collected project-level output data into monetized impact estimates. For example:

  • Investments in affordable housing create discretionary income for families by alleviating housing cost burdens. Research shows that low-income families will spend this additional income to purchase critical necessities such as food and health care.
  • High-performing schools boost a child’s lifetime earnings via improved high school graduation rates, while also lowering the chances of incarceration and decreasing health care costs.
  • Attending high-quality early care and education programs is linked to better educational attainment, lower incarceration levels and improved health that persist into adulthood—especially a lower incidence of heart disease, stroke and diabetes.

Try it out for yourself at liifund.org/calculator.

Send feedback about the calculator or tell us how you are using it in your work by emailing calculator@liifund.org.

Nancy O. Andrews is President and Chief Executive Officer at LIIF.
Dan Rinzler is Special Projects Coordinator at LIIF.

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Investing in What Works for America’s Communities is a joint project of the Federal Reserve Bank of San Francisco and the Low Income Investment Fund.

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Funding for this project was generously provided to the Low Income Investment Fund by the Citi Foundation.