Measuring a PPP by looking at its net outcomes is relatively straightforward: what is the magnitude of the effect of the PPP? While at first this might seem like a simple way of looking at the success or failure of a PPP, there are numerous ways to quantify a partnership's effect. Net effect could be expressed in units of dollars, lives saved, patients treated, or vaccines administered. It is crucial to assess value in terms of the units that make the most sense for a given project.
One promising new approach for measuring these different partnership objectives, intended outcomes, and goals is called the Impact Rate of Return (iRR). Developed by Columbia University professors Howard W. Buffett (son of Warren Buffet) and William B. Eimicke, iRR utilizes a standardized formula for measuring the success of partnerships.66 Inspired by value investing-one of history's most successful investment paradigms, Buffet and Eimicke's five-point management framework utilizes iRR to help predict which projects or programs will be best at creating social value. Although a detailed illustration of iRR is beyond the scope of this guide, such a measurement tool could help PPPs deliver innovative, inclusive, and long-lasting solutions that maximize collaborative efficiency as well as positive social impact.
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66 Buffet, Howard W.. 2018. "Chapter 12 | The Performance Framework: Predicting the Social Value of a Partnership." In Social Value Investing: A Management Framework for Effective Partnerships, edited by H. W. Buffet and W. B. Eimicke, pp. 257-282. New York, NY: Columbia University Press.