By: Ishaq Zaighum, Measuring and Evaluation Fellow at SEED SPOT
SEED SPOT keeps a close eye on the relationship between its program costs and the impact those programs have on the community. We believe it is important to show our donors how every dollar they give is used and how those gifts are changing communities nationwide. Understanding this relationship provides insights into how important it is to invest into impact-driven businesses that generate outcomes to address the social challenges and contribute towards the economic growth of the country.
The concept we use at SEED SPOT to establish that quantifiable relationship is known as Value for Money.
What is Value for Money?
Every program we run is a direct investment into an impact-driven entrepreneur. From our programs, entrepreneurs go on to create ventures that look to solve some of the most pressing problems in their communities. The Value for Money analysis helps us to assess how efficiently our programs convert the amount of capital invested in them into venture outcomes. We looked at the costs of our programs over time and compared this with a few outcomes that are typically indicators of a promising, early-stage venture like capital raised, revenue generated, donations and grants received, and customer/beneficiary base. This analysis gives us insights into how efficiently we were able to run programs using the funds available to us from our donor base.
Why is it important?
- It helps us understand how our programs are helping our entrepreneurs grow their businesses
- It helps us quantify how lives are being changed by our work based on the amount we invested into our programs
- It helps us communicate how donations materialize into tangible impact for our ventures
How We Calculate It
To calculate value for money, we followed the guide developed by the Global Accelerator Learning Initiative (GALI) designed to explore and answer key questions about enterprise acceleration, such as:
For every $1,000 invested into a program:
- How much revenue is generated?
- How many grants and donations are received?
- How much capital is raised?
- How many lives are impacted?
For this calculation, we use all direct costs associated with running our programs which includes costs related to training, program materials, marketing, recruiting, evaluation, entrepreneur support, and the grants we give to entrepreneurs.
For every $1,000 donated to SEED SPOT programs, our entrepreneurs:
- Have generated $6,132 in revenue
- Have raised $1,887 in grants / donations
- Have generated $4,986 in capital
- Have impacted 879 lives
We are proud of the work our entrepreneurs do every day and are grateful for each and everyone one of our supporters. Your donations matter. We truly believe in the power of entrepreneurship to transform lives and solve some of the most pressing problems we face today. If you want to help us further our mission, #InvestInImpact today by joining the SEED SPOT 500 or making a one-time donation. You’ll help us impact more lives and solve meaningful problems through the entrepreneurs you support.