How to Calculate or Measure Benefits for non Profit Projects?

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How to Calculate or Measure Benefits for non Profit Projects?
Petre Mihai
When I do a project for social interests, how can I calculate benefits as part of a cost benefits analisis?

Cost-Benefit Analysis for non Profit Projects
Samantha Wood
It depends on the nature and context of the project itself. However, consider how to measure profits with principles based on the objectives of the project.
For example, if your focus is on empowerment of a marginalised community then to what extent have they been empowered, has quality of life been improved if so, in what way.
Measuring the CBA of such an organisation cannot be done in financial terms, because this type of organisation is not focused on financial return on investment. Its focus is on eradicating a social problem.
One thing to also note, is that the term 'non-profit organisation' should be termed as 'more than profit organization'! These types of organisations do make profit, the difference being is that the profit is used to reinvest into solving a social problem.

Cost-Benefit Analysis for non Profit Projects
Pierre Amenold, Member
Indeed if there is a profit, it is not for the non-profit organisation itself or for its shareholders, but for example for the target community.
I think the CBA should help to determine how much improvement the target group will achieve. In some way, the target group can achieve better quality results (financial or social), depending on the implementing method being used.

Cost Benefit for non Profit Projects
M.B. Mphahlele, Member
Determination of costs is normally easy.
Benefits determination can be a complex exercise. For instance benefits yielded by a tarred road will include comfort of the road users, improvement in fuel efficiency and reduced cost of repairs of the vehicles driven on that road, reduction of accidents, etc. These can be quite subjective at times.
The challenge to the cost/benefit specialist is to do the estimation as scientifically as possible. The literature on the subject is quite large. Suggestion: read "The International Library of Critical Writings in Economics 152 - Cost-Benefit Analysis, Harberger A.C and Jenkins G.P. (2002) Published by Edward Elgar Publishing Limited.
I hope this will help.

Consider Who is Getting the Benefits
Tyrone Skogstrom, Member
The decision Yes on No for an initiative in this case should consist of qualitative benefits only, together with a cost analysis. You should not mix your organization's own cost with the benefits value for the citizens ow who else is effected. It is not "the same value".
You can consider and report a cost reduction for citizens (for example) as a benefit, but it still should not be together in one cost benefit analysis result.
Intangible benefits should be able to exist on their own merits. To "invent" money value you never can see or measure it in a totally wrong way (however you can find these calculations all over the place).


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