Human Development Index (HDI) is a composite index that includes three core dimensions: long and healthy life, knowledge, and a decent standard of living. HDI is calculated using four indicators: life expectancy at birth, expected years of schooling, mean years of schooling and Gross National Income (GNI) per capita. HDI is often used by NGOs and bodies such as the United Nations to quantify the quality of life in emerging countries. While a single numerical digit offers a quick snapshot of the development in a region, there are a number of shortcomings of this metric when attempting to extrapolate the impact of specific non-profits and social enterprises.
The HDI provides a poor framework for testing NGOs. An example of this is the life expectancy component of HDI. To evaluate an NGO on their life expectancy improvements is almost impossible, yet is a core fundamental for HDI. IRIS and HDI metrics compare similar statistics and reflect similar health outcomes of a population. While the IRIS and our own metrics tend to be more specific than the HDI ones, they still all show a similar pattern in terms of education. Both metrics have a similar outcome which all show the housing and land people require to have a decent standard of living. In this sense, HDI and IRIS are all directly comparable.
Some of the limitations of HDI are how it is impacted only when an organization works within one of the three core dimensions. For example, while a non-profit that plants millions of trees would benefit the world, its work would not change the HDI of a country. HDI is most commonly calculated on a national scale. This means that in order to calculate the HDI impact of a single organization, they must only work in one country and it is best that they work on a national scale. Additionally, in order to quantify the actual impact that an organization would have on HDI, it must publish specific outcomes that are directly related to HDI metrics on a per dollar basis. If there were a startup that created a product that drastically increased life expectancy, for example, it would have to publish exactly how many years longer someone is expected to live if someone were to give the company a certain amount of money.
