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Pro Bono Economics has developed a seven-step approach to assess the wellbeing cost-effectiveness of a charitable intervention, in partnership with the What Works Centre for Wellbeing.

In a typical economic analysis of charitable interventions, outcomes are compared on a monetary basis. However, for many charitable interventions the benefits extend well beyond the obvious financial impact to measure, for example; the benefit to an individual from alleviating anxiety or strengthening relationships in a local neighbourhood.

Wellbeing measurement offers a potential way to resolve this challenge – providing a more direct, meaningful indicator of the impact charities can have on the quality of an individual’s life. Using wellbeing to assess different interventions should provide a more complete picture of the benefits and help charities, funders and policy makers to make better decisions.

How should these outcomes be measured? Using the ONS’s standard scale, where overall Life Satisfaction is measured subjectively on a scale of 0-10, the wellbeing cost effectiveness of an intervention can be evaluated as the cost to generate an improvement in Life Satisfaction of 1 point for a single year. This is better known as a WELBY (wellbeing adjusted life-year).

Directly measuring the wellbeing impact of interventions using the ONS measure of Life Satisfaction is a pragmatic, practical approach to assessing a charity’s impact. However, many charities are only just starting to gather data using the ONS wellbeing measures so there is often a need to estimate the wellbeing impacts of an intervention based on data about other outcomes.

This guide provides a solution for those who seek to measure their wellbeing cost effectiveness, but who have not yet directly measured wellbeing using the ONS measure of Life satisfaction. We hope this will be a helpful guide for our volunteer economists as well as other evaluation professionals operating in the charity sector who are aiming to incorporate wellbeing in their analyses.

If you are a charity or a funder who would like to examine the impact of your interventions on the wellbeing of your beneficiaries then please get in touch with us at [email protected]