Monetisation approach
One of three approaches to Social Impact Assessment, converting social outcomes into a rupee value so investors can compare returns, using methods like Social Return on Investment and cost-benefit analysis.
In plain language
A donor may compare two very different social projects, say a health camp and a jobs programme. It is hard to judge which one "did more good." The monetisation approach tries to solve this. It puts a rupee value on social outcomes.
The workbook's own words: monetisation "helps to express social benefits in monetary terms." This makes results understandable to investors and funders. Once an outcome has a rupee value, it is easy to compare. Different social enterprises can then be judged side by side.
But the workbook is honest about the cost of this convenience. Some outcomes resist being priced. Trust, confidence and community cohesion are hard to monetise. Chasing a rupee number can also crowd out a bigger question: how far did the social mission actually succeed?
How it works
Table 7.1 (Chapter 7, section 7.1.2) sets out the monetisation approach's strengths, weaknesses and methods, alongside the two other approaches to Social Impact Assessment:
| Approach | Methods | Strength | Weakness |
|---|---|---|---|
| Qualitative | Theory of change, structured interviews, focus groups, case studies | In-depth study of social impact | Time-consuming; needs rigorous research design |
| Quantitative | Surveys, statistical data analysis | Analyses large amounts of data | Needs statistical and mathematical skill |
| Monetisation | Social Return on Investment (SROI), Cost-Benefit Analysis | Expresses benefits in money terms, allowing comparison across very different enterprises | Hard to monetise human/social capital effects; can lose sight of the broader social mission |
The workbook notes SROI specifically is "calculated based on the Impact Map" — it builds on the same mapping work an assessor does to identify and value outcomes. There is no single tool that captures every aspect of social impact, so the workbook's advice is to pick the approach that fits the organisation's own objectives and the intervention being assessed.
A worked example
Illustrative NPOs; figures are made up.
Ankur Trust runs a livelihoods programme. Its assessor uses the monetisation approach, calculating that Rs 1.20 crore spent on the programme generated Rs 3.6 crore in additional lifetime household income for beneficiaries — an SROI ratio of 3:1.
Compare this against Sahay Foundation's health camp, costing Rs 80 lakh, where the assessor also monetises averted medical costs and lost workdays, arriving at an SROI of 2.5:1.
A donor with limited funds can now compare the two projects on a common, monetary scale — even though one is about livelihoods and the other about health — which is exactly the comparability problem the monetisation approach is built to solve. The donor still needs the qualitative and quantitative approaches to understand why the numbers differ.
Why NISM asks about it
Chapter 7 (Social Impact Assessment Reporting), section 7.1.2 and Table 7.1, names monetisation as one of three approaches to Social Impact Assessment, alongside qualitative and quantitative research, with SROI and cost-benefit analysis as its methods. Expect a question asking which approach uses SROI, or which approach is criticised for being unable to monetise certain human and social capital effects.
Common exam traps
- SROI is calculated from the Impact Map — it is not a standalone number pulled from nowhere.
- Monetisation is one of three approaches, alongside qualitative and quantitative.
- The workbook's own criticism: monetisation "can lead to a situation where there is a lack of information on the broader realization of the social mission."
- No single approach or tool captures every aspect of social impact — the right choice depends on the organisation's objectives and the intervention.
Where this is taught
Free preparation for NISM Series XXIIIRelated terms
- BACO RatioAcumen Fund's ratio, used in the Fully Integrated Model, for judging whether a social enterprise investment is a viable use of capital based on financial, technological and social leverage.
- Qualitative approachOne of three approaches to Social Impact Assessment, using tools like Theory of Change, interviews, focus groups and case studies to reveal the deeper, in-depth nature of social change.
- Quantitative approachOne of three approaches to Social Impact Assessment, using surveys and statistical analysis to process large volumes of data into results stakeholders can quantify and compare.
- Social Impact AssessmentA systematic evaluation of the social, ethical, cultural and environmental consequences of a project or organisation — positive and negative, intended and unintended — taking an "outside in" view.