devil lies in the details

Last Saturday I attended a class on "Social Accounting & Audit". One of the aspects the lecturer mentioned was that there are many ways to quantify the social benefits spread by an organization. For example, one NGO she worked for was working with artisans. While preparing the social account for it, the social auditor saw that on an average each artisan was earning Rs 100-200 more (I am guessing monthly) due to the NGOs intervention.

Now, while preparing the social account they calculated an amount equal to Rs X where

X = A (number of artisans) * B (number of years for which social account is being stated) * C (amount of increase in arisans' income)

This resulted in a figure that was huge giving an impression that the NGO had a profound effect on the community it was working with. Whereas this may the case, there is another statistic we should consider - The relative increase in the artisans' income. How much more is the artisan earning as compared to his income without the NGOs intervention. And see how it makes a difference.

If an artisan's monthly income is Rs. 500 then a Rs 100 increase in his income would amount to a 20 percent relative increase. However, if an artisan's monthly income is Rs 5000 then a Rs 100 increase in income would translate into a 2 percent increase. A helluva difference.

So while the NGO may have earned a lot in social accounting, it may have not necessarily made the kind of change in the lives of its stakeholders as it may seem at first glance.