Return on Investment (ROI)

Dr. Chang is a Volunteer Development Officer with Senhoa. He received his PhD from the University of California, Irvine in Psychology and Social Behavior in 2012. As a doctoral student, his research projects focused on mental health issues among Asian-Americans and barriers in seeking mental health help. He currently works as a researcher with Riverside County's Children's Services Division, where he conducts research and program evaluation. When not dreaming of saving the world, he enjoys playing the cello and reading books.

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As donors, we have a lot of great options when it comes to nonprofits and their causes. We might be interested in a number of issues, such as clean water initiative, education, development or human rights. But money is a limited resource, and although we wish we could do everything we can to help everyone in need, we have to be selective about how we spend our money.

So how do we decide where our money should go?

The United Nations asked the very same question and came up with a list of 169 targets for helping the world’s poor (MIllennium Development Goals). But 169 of anything can be a bit unwieldy, so the Copenhagan Consensus Center, with the help of 32 of the world’s top economists, recently undertook the task of ranking those 169 targets and came up with 27 “phenomenal” targets.

Phenomenal targets are identified by calculating the return on investment (ROI) on each target. ROIs allow us to quantify know how much good will be done for each $1 spent on a certain issue. For example, for each $1 spent on malnutrition, you will get $59 of good. For pre-primary education, you get $30 back. Each phenomenal target provides a ROI of more than 15 times the money that is placed in.

With ROIs, we have an objective way of deciding where to invest money. By choosing priorities with the highest ROI, we are achieving the most “bang for our buck."  Several of these 27 “phenomenal” targets dovetail with Senhoa’s own program goals. I’ve listed them below in bold:

By 2030, increase by X proportion of children able to access and complete inclusive quality pre-primary education and other early childhood development programs

The Lotus Kids Club (LKC) targets children of the poor and “street-working” families.   The primary vocation of the families of the target population is scavenging, collecting garbage and recyclables. Because many parents would rather have their children work than attend school, more than half of children of the street-working poor never attend school. LKC encourages families to keep their children in school through subsidies of food, supplies, and school materials, to prepare these kids for primary school through pre-primary education. For 2014, there are currently over 100 kids in LKC’s preschool program. Through 2013, we have helped 41 kids to graduate from the program to enter primary school.

Ensure equal access to quality education and eliminate gender disparities at all levels of education and training

A principal focus of LKC and our jewelry program is to reduce gender disparities in education and promote educational attainment among girls. Because of Cambodia’s poor domestic situation, young females in Cambodia are especially at risk for human trafficking and domestic violence. In addition, girls are less likely to attend school than boys. Only about ¼ of girls enroll in secondary school in Cambodia (Human Rights Watch, 2010). We offer incentives to kids in LKC and our jewelry program to attend school, such as school supplies, support for families of kids in our program and a pay scale for girls in our jewelry program that gives a higher pay rate to girls who are in school.

By 2030, we envision to end all forms of malnutrition, including achieving by 2025 the internationally agreed targets on stunting and wasting in children under five years of age

Kids in our preschool program are provided with breakfast and lunch.To date, we have provided over 15,000 breakfasts and 10,000 lunches to children. In addition, families of our children who attend school are provided with monthly rice subsidies, education sessions, and a sponsorship package. Through September of 2014, we have given away 23,000 kilos of rice to families. We recently received a grant from Vitamin Angels to distribute Vitamin A and Albendazole to 250 kids each year.

Ensure small-scale industrial producers have affordable access to credit and financial services

Senhoa recently began a program to provide microloans and vocational training to individuals who are interested in starting a business. We hope to have more details on this program soon.

Achieve universal health coverage (UHC), including financial risk protection, with particular attention to the most marginalized people in vulnerable situations

We work with local agencies to provide regular dental check-ups and health screenings by registered healthcare workers in all of our programs. In January 2013, a check-up of 30 of our preschool students revealed that 8 were underweight according to WHO, 3 had ear infections, 7 required vision re-testing, 1 had scabies and 22 had dental decay.

Ensure universal access to sexual and reproductive health for all

Women in our jewelry program and Lotus House receive annual medical checkups and Hepatitis B vaccines. Life skills training on gender rights, hygiene and empowerment are provided by a social worker.

If you enjoyed this post, please check out these links:

Easy to Read WSJ Summary Table of the report

Freakonomics podcast on ROIs and the WHO

Wall Street Journal article on ROIs and the WHO