Social Impact Model - Floods

This is the latest edition to a series of Social Impact Models I have been creating which help companies think about the value of the corporate donations they make. As usual, the principal question it is trying to answer is: for every dollar a company donates, how many dollars of benefit does that donation create for society?

In this case, a company is considering contributing money toward a project that would reduce the frequency or severity of flooding in a community. The model compares the expected cost of flooding before the project with the expected cost after the project is completed. This includes damage to homes, businesses, public infrastructure, emergency-response costs, temporary housing, lost productivity, health impacts, and environmental restoration.

I designed the model to account for both how often a flood is expected to happen and how much damage it would cause when it does happen. It then estimates how much of that damage could be avoided if this project were to materialize. Since many of the benefits would occur over several years, the model discounts the expected future savings to calculate their present value.

Another important consideration was to avoid producing an overly optimistic result. The model adjusts the estimated benefits based on the strength of the available evidence, the likelihood that the project will actually be completed, and whether the donation is truly responsible for making the project happen. It also considers whether the project could shift harm somewhere else and subtracts ongoing maintenance costs and other negative effects.

The final dashboard shows the estimated social value created for every dollar donated, along with conservative, base, and optimistic scenarios. It also shows the total value attributed to the company’s contribution and the main sources of that value.