R Factor (Recycling Rate)

Definition

The proportion of deployed capital that returns to the pool through beneficiary pay-forward contributions. Ranges from 0 (no recycling, like a grant) to 1.0 (perfect recycling).

Formula

R = Capital Returned / Capital Deployed

Example

If $100,000 is deployed and beneficiaries pay forward $85,000 over time, R = 0.85 (85% recycling rate).

Source

PSC Section 3.1

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Related Terms from Perpetual Social Capital

Perpetual Social Capital (PSC)

System Value Multiplier (SVM)SVM

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System IRRSystem IRR

Cycle Durationτ (tau)

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Perpetual Social Capital