1. What is Net Impact?

Net Impact is a fundamental economic and social metric that calculates the overall effect of an intervention, project, or decision by subtracting total costs from total benefits. It provides a clear measure of whether an initiative creates positive or negative value.

2. How Does the Calculator Work?

The calculator uses the Net Impact formula:

Where:

• \( Benefits \) — Total positive outcomes (monetary or non-monetary)
• \( Costs \) — Total expenses and negative consequences
• \( Net\ Impact \) — Overall result indicating net gain or loss

Explanation: A positive net impact indicates that benefits exceed costs, while a negative value suggests costs outweigh benefits.

3. Importance of Net Impact Calculation

Details: Calculating net impact is crucial for decision-making, resource allocation, project evaluation, and policy analysis. It helps organizations prioritize initiatives that deliver the greatest value and avoid those with negative returns.

4. Using the Calculator

Tips: Enter benefits and costs in consistent units (currency, social units, environmental units). Ensure all relevant benefits and costs are included for accurate assessment. Values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What types of benefits and costs should be included?
A: Include all direct and indirect benefits (revenue, time savings, social benefits) and costs (expenses, opportunity costs, negative externalities).

Q2: How do I quantify non-monetary benefits?
A: Use proxy measures, willingness-to-pay surveys, or standardized conversion factors to assign monetary values to social and environmental benefits.

Q3: What does a negative net impact mean?
A: A negative net impact indicates that costs exceed benefits, suggesting the initiative may not be economically or socially viable.

Q4: How is net impact different from ROI?
A: Net impact provides absolute value, while ROI shows relative return as a percentage. Both are important for comprehensive analysis.

Q5: Should I include opportunity costs?
A: Yes, opportunity costs represent the value of the next best alternative and should be included for accurate net impact assessment.