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Right now I’m working on the social return on investment analysis of WITNESS’s campaign to reform the California Juvenile Justice System. The Schwab Foundation has put up funds to support small-scale Social Return on Investment Analyses (see the Framework paper, not yet loaded) for five enterprises and a workshop on SROI in January at their annual Summit preceding the World Economic Forum. How do you systematically capture and track the value created by a human rights video campaign?

I just put in their 22-minute 2001 video, Books Not Bars, the first of two they’ve helped produce and disseminate to catalyze movement. I expected to be impressed with the quality of the video, and probably to feel anger about the injustice they’re trying to expose, maybe some guilt or shame. The surprise was that about 15 minutes into it I started crying.

I’m wondering if this is related to sleep deprivation? I was out late and drank a lot…. or maybe hormones? It’s Sunday so I’m here in the office alone and free to overtly feel. I’m already feeling wired and anxious, ok, I admit it, intimidated– I really want Gillian and the others to think my analysis is worthwhile, and time is short and I’m doing it mostly by myself.

…maybe some of the faces remind me of the kids I taught and worked with in Chicago, or the 15-year old, sweet, black father whose purple crayon portrait I drew and gave to him in the all-volunteer education program at the juvenile detention center in Greenville, Misssissippi in 1994. It’s bringing back the raw feelings for those 2 years in the Delta and the years afterwards doing social work in Chicago: the overwhelming disillusionment about my country and about people in general when I realized how whole generations of people were systematically shut out and everybody could see it and they just went about their lives, that protracted grief and outrage combined with an extreme case of the twentysomething fear/angst that comes with the passage from college into real life when you’re ejected into a vaccuum without any context at all for the first time in your life.

It was because of that experience that I became a social entrepreneur. And it was because you can’t get enough d–n money to fund the work even when you’re doing the most truly necessary work there is that I became obsessed with how you measure non-financial value in a way the capital markets can use. So here I am, diving into this analysis in hopes it is somewhat additive to the smart metrics Gillian and her team have already, and in hopes I can help paint a convincing picture for her and the other Schwabbies that if enough social entrepreneurs use the same process for assessing and reporting their social value, the capital markets will move differently.

The stats are a thin extraction from the video that I can put into words: the US is the world’s largest jailer… 1/4 of the world’s prisoners are in America… 1 in 10 black men here are in jail… a black kid is 48X more likely than a white kid to do time when arrested on a drug-related charge… 3 in 5 kids will become reinvolved in the system after their release. Spending on prisons up 800 percent in the past 20 years- a pretty frigging great IRR for somebody and a pretty crap one for a whole bunch of others. How does that compare to other US industries?

Now on to the job at hand: an experimental, systematic valuation of the role WITNESS’s video has actually played in this human rights campaign. Empirical evidence of impact item #1: 15 minutes to tears.

About a year ago we put out a call to the field for commercialization plans for technologies that could address the MDGs. We imagine there are a lot of technologies sitting around that have made it most of the way through R&D but their developers didn’t or couldn’t bring them to market for some reason– maybe there wasn’t a billion dollar market for it, or maybe it wasn’t in the company’s core competency. We attracted a powerful set of plans and decided to put them in a catalog called “SET MDGs”) last spring to see if we could spur connections between these technologies and the resources to get them into the world.

In the Catalog we played around with what information investors might need to inform a decision whether to fund a social venture. If investors are using conventional criteria, they’re trying to assess the financial risk and return of the deal. To get at this initially, they expect executive summaries to speak to the management team’s strength, the market opportunity, and the proposed solution or technology, so we put that into our new Catalog summaries. If they’re from the new capital markets, however, we imagined they’d also need to understand what the environmental and/or social implications of the deal are… and there are few conventions around how that should be summarized- let alone what the due diligence process would entail.

What do investors in this new capital market need to know in addition to the potential financial risk and return? Like a Sudoku puzzle, there are a few easy boxes to fill. One thing might be a check of whether the impact on the environment will be net positive or at worst zero compared to what would have happened anyway. Another has to be something about the kind of benefits a venture may have, and how likely those are to be achieved. It gets trickier when we drill into each of these, although many people are boldly going…

And then there’s the issue of how to present something that connects with that particular investor’s intuition or chemistry… hard to do on a page, but maybe more doable than we have assumed?