A Strategy for Systematically Increasing Measurable SROI Outcomes
Two central challenges facing foundations and high impact investors are to ensure accountability and to deliver superior outcomes. Kokoro offers a novel solution to both challenges by generating overlapping and synergistic virtuous circles. Here are five simple overlapping steps.
Step # 1: Increase Grantor Productivity Gains around a central domain of concern—for example: poverty, homelessness, behavioral health, loneliness, food insecurity, youth development, elder care, climate change, and environmental justice—by building high performance cohorts using Kokoro for Organizations, focused on the precise local interests and concerns of the foundation or high impact investor.
Step # 2: Condition some grants (as a pilot experiment) on training in Kokoro for Beneficiary Organizations. This delivers several benefits simultaneously:
- It enhances productivity within the recipient organization
- It provides a natural means for the donor to track and measure performance continuously and provide feedback, encouragement, and support, rather than waiting for a year-end report.
- It provides ongoing feedback to the foundation or high impact donors on their own programs, enabling them to adjust and adapt far more agilely.
Step # 3: Value High Impact Outcomes (SROI). Kokoro provides a mathematical formula to support the foundation’s own metrics to calculate SROI, in terms of reduced costs to society and derived benefit streams in new opportunities and innovations. High poverty rates can lead to increased crime, homelessness, and strain on social services. For example, in Santa Barbara County, nearly 70,000 people live in poverty, equating to one out of every six adults and one out of every five children. This significant portion of the population living below the poverty line places a considerable burden on local resources and services. Using Kokoro’s analytics we estimate the healthcare costs of poverty to Santa Barbara taking account of Santa Barbara’s high cost of living in a range of $ 1.3-1.4 billion annually.
Step # 4: Compound the Multiplier Effect Through Collaborating Cohorts. The cohorts can rapidly become agents for transmitting new learning across public sectors which can be practically applied by other foundations and high impact donors to the original challenge (i.e. poverty) which they face in common or to other important societal and environmental challenges, thereby creating a Kokoro ecosystem for beneficial change and resilient adaptation.
Step # 5: Closing the Circle. Under its business model Kokoro will begin Paying Forward from profits by the end of Year 2 (2027) to the causes and members of the ecosystem that demonstrate high productivity and SROI gains, thereby further compounding the SROI benefit streams from the original investment.
In recent years a number of foundations have pioneered the field of metrics and methodologies for high impact investing such as Acumen, the Rockefeller Foundation, Global Impact Investing Network (GIIN), and the Minderoo Foundation. Kokoro offers not only a set of tools, methodologies, and metrics that can easily dovetail with these efforts, but also an interactive process and ecosystem that knits grantors and grantees in living virtuous circles that can accelerate and compound beneficial outcome streams.
How might you estimate the annual healthcare costs to Santa Barbara from your above description?
1. Identify Key Data Points
a. Population of Santa Barbara County: Approximately 448,000 people as of 2023.
b. Poverty Rate: About 15.7% (70,000 people, according to the data cited).
c. Average Healthcare Costs for Low-Income Populations: Research shows that individuals living in poverty have disproportionately higher healthcare costs due to chronic illnesses, emergency care use, and mental health challenges.
According to national studies: Average annual healthcare spending per person in the U.S.: ~$12,000. Low-income individuals’ healthcare costs are often 20%-40% higher due to unmet health needs and reliance on emergency care. Use a 30% premium multiplier as a mid-range estimate.
2. Calculate Estimated Healthcare Costs
a. Estimate Baseline Costs for Individuals in Poverty: Baseline Costs: $12,000 (average healthcare spending). Adjusted Costs for Poverty: $12,000 × 1.30 = $15,600 per individual annually.
b. Multiply by the Number of People in Poverty: People in Poverty: 70,000. Total Costs: 70,000 × $15,600 = $1.092 billion annually.
3. Factor in Additional Costs a. Social and Economic Multiplier Effects
Studies suggest that unaddressed poverty exacerbates costs in other areas, including Preventable emergency care and Increased Medicaid/Medicare reliance.
Mental health crises: A reasonable multiplier for indirect healthcare-related costs is 10%-15%, bringing the total cost to $1.2–$1.25 billion annually.
b. Consider Healthcare Cost Variations by Region:
4. Refine with Local Data
If available, Medicaid spending, local hospital reports, or public health budgets in Santa Barbara could be analyzed to validate and refine this estimate.
Example: Local hospitals’ uncompensated care costs can serve as a benchmark.
Santa Barbara’s high cost of living and healthcare costs might increase this estimate by another 10%, suggesting a final range of $1.3–$1.4 billion annually.
This approach provides a high-level estimate, and further refinement would require granular data on healthcare utilization and spending specific to Santa Barbara’s population.
