In the world of philanthropy and nonprofit management, doing good isn’t enough. Today, donors, investors, and stakeholders increasingly ask: “What’s the return?” But unlike private sector investments, where ROI can be measured in dollars and cents, philanthropic investment returns must account for social, economic, and community value—returns that are just as vital but often harder to quantify.
The Milken Institute’s article, “How to Evaluate the Returns on Philanthropic Investment”, lays the foundation for understanding how to approach these questions. It offers a compelling reminder: organizations don’t need a massive budget or team of analysts to begin evaluating their impact—they just need a clear framework, the right tools, and a commitment to continuous learning.
Here, we build on the Milken Institute’s insights with practical strategies, evaluation models, and tools that nonprofits and funders alike can use to evaluate the Return on Philanthropic Investment (RPI)—and communicate it with power.
1. What Is Philanthropic Return on Investment, and Why Does It Matter?
Philanthropic ROI—also known as social return on investment (SROI) or impact return—measures the outcomes created by a nonprofit’s activities relative to the resources invested. But unlike pure financial ROI, RPI accounts for broader benefits:
- Improved education and employment outcomes
- Lower public costs (e.g., reduced crime or ER visits)
- Healthier communities and increased life satisfaction
- Long-term behavior change or system reform
This measurement isn’t just for funders. Nonprofits that can articulate philanthropic return on investment are more likely to:
- Win grants and donor support
- Refine their strategies over time
- Demonstrate value to communities and policymakers
2. Start with Theory of Change and Logic Models
Before diving into data, organizations must define what success looks like. This starts with a Theory of Change—a visual roadmap of how a program’s activities lead to outcomes and impact.
Paired with a Logic Model, it becomes a practical tool to:
- Align stakeholders
- Clarify what to measure
- Identify short-, medium-, and long-term outcomes
3. Use the SROI Framework to Monetize Impact
The SROI (Social Return on Investment) framework, popularized by organizations like Social Value UK and the Roberts Enterprise Development Fund (REDF), helps quantify impact using real-world dollar values.
A basic SROI formula:
SROI = (Social Value Created) / (Investment)
For example, a workforce development program might:
- Cost $500,000 annually
- Lead to $2 million in increased wages, decreased public benefits, and reduced recidivism
SROI = $2,000,000 / $500,000 = 4:1
That means every $1 invested yields $4 in social return.
Resources to help you calculate SROI:
4. Choose Right-Sized Evaluation
As Milken points out, evaluation should match the scale of investment. It should also match where your organization sits on the “maturity curve.” To become established and graduate to truly transformational impact you’ll want to have all the necessary people, processes and technology in place to demonstrate and communicate the good you’re driving.
| Investment Size | Evaluation Approach |
|---|---|
| Under $50K | Simple outcome tracking (pre/post surveys, interviews) |
| $50K–$500K | Logic model + output/outcome tracking with control comparisons |
| $500K+ | Independent evaluation, cost-benefit analysis, longitudinal tracking |
5. Blend Quantitative and Qualitative Data
While numbers are powerful, stories are sticky. The most compelling impact reports combine:
- Quantitative: Metrics like job placement rates, housing stability, recidivism reduction, etc.
- Qualitative: Participant testimonials, staff reflections, community feedback — what story can you tell that truly inspires people?
This balanced approach allows for both accountability and authenticity, building trust with funders and the communities served.
6. Tap Free Public Data Sources for Benchmarking
Many nonprofits overlook public data that can help benchmark and strengthen their ROI case. Use these to estimate savings, economic multipliers, or baseline conditions:
- Data.gov: Hundreds of government datasets
- US Census Bureau: Demographic and economic trends
- Living Wage Calculator (MIT): Economic baseline needs by region
- WSIPP: Cost-benefit ratios for hundreds of interventions
Don’t know where to go next? Start here…
7. Consider the Ripple Effect: Systems-Level Impact
Some investments create indirect or long-term value:
- A tutoring program may reduce teen pregnancy years later
- Community organizing can influence local policy reform
- Mental health support may lower ER and incarceration rates
These aren’t always immediately visible—but tracking these “ripples” sets visionary nonprofits apart.
8. Visualize the Journey with Dashboards
An effective way to track and communicate ROI is through impact dashboards. These can include:
- Inputs (resources used)
- Activities (program delivery)
- Outputs (how many served)
- Outcomes (behavior or condition changes)
- ROI metrics (dollars saved/generated)
Tools to create dashboards:
- Datawrapper
- Google Looker Studio
- Airtable, Tableau, or even Canva for visuals
9. Communicate Value with Confidence
Ultimately, ROI data is only useful if it’s shared effectively.
Great impact reports should:
- Highlight 2-3 powerful statistics
- Use visuals to break down outcomes
- Tell stories that reflect the human side of the data
- Translate outcomes into public savings, economic growth, or long-term value
10. Start Small. Learn Fast. Improve Continuously.
The message from Milken Institute rings true: organizations don’t need perfection—they need momentum.
Start with:
- A simple logic model
- One or two outcomes you can measure reliably
- Free tools to calculate cost-benefit
Then iterate. Over time, you’ll build an impact measurement system that not only helps you attract funding but sharpens your program design and deepens your mission.
What Now?
Are you ready to turn your story into proof of impact? If you’re a nonprofit leader, program director, or fund development professional, now is the time to elevate your funding pitch with a custom impact report from Spera Connect.
Many organizations struggle to communicate their value in concrete terms. Donors want to see outcomes, but you may not have the internal time, tools, or data clarity to deliver. That’s where we come in.
The Spera Connect Custom Impact Report transforms your program inputs into clear, funder-ready outcomes. We gather your program data and align it with leading public datasets, evaluation benchmarks, and economic multipliers—so you can show exactly how your program saves taxpayer dollars, increases community wealth, or improves long-term outcomes like health, graduation, or employment.
For a low one-time fee—less than the cost of a single grant application—you’ll walk away with a professionally designed report that:
Quantifies your social return on investment (SROI)
Highlights your outcomes with compelling visuals and narratives
Builds trust with funders and board members
Saves you 20+ hours of DIY impact evaluation work
You could spend weeks trying to pull this together yourself—or let us help you make your case in a matter of days.
⚡ The next funding round is always around the corner. Don’t wait.
Click below to get your custom report started and position your organization as a data-informed, investment-ready force for good.
Final Thought on Measuring Philanthropic Return on Investment
The future of philanthropy is evidence-based, outcome-driven, and impact-conscious. Whether you’re a grassroots nonprofit or a major funder, investing in evaluation capacity is one of the highest ROI decisions you can make.
Because in today’s world, impact is currency—and those who can measure it will lead the way.