Emancipation from the need to prove…. how social accounting can break the shackles of burdensome reporting

A couple of weeks ago I attended the first ever National Social Prescribing Network Research Conference at the University of Salford. Currently engaged in attempting to understand the nature of social prescribing across Greater Manchester, I found the conference both informative and inspirational.

I didn’t expect to be struck with a need to speak out about the obvious link (well it’s obvious to me…) between social prescribing and another of my ‘social’ interests – social accounting.

Social prescribing is a means of enabling GPs, nurses and other healthcare professionals to refer people to a range of local, non-clinical services. This approach is gaining momentum as an alternative to clinical care and prescribed medicines.

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Caught in a spin – can impact unlock a contract?

I have recently had the honour of being involved in the Investment and Commissioning Panel for the Impact Management Programme (IMP). Examining a range of exciting submissions from across the country, I have read how enterprising organisations are seeking funding from the Impact for Growth strand of the IMP to raise investment for their work or write successful tenders, and in many cases to seek contracts with the Public Sector.

A healthy number of these organisations have also secured previous ‘social investment’ to help with their contract readiness.

But experience leads me to query why an ability to manage their impact will make these charities, social enterprises and ‘ventures’ more likely to secure a contract with the Public Sector?

As Adrian Hornsby wrote in an article for the same programme in October 2017:

“ventures and commissioners ‘pass like ships in the night’; and with commissioners showing hesitancy around impact, and social investors inevitably following revenues back to commissioners, the question arises as to where the essential driver for impact management can be found.”

Adrian’s article added to my questioning; what would be the motivation for managing and explaining your social impact if social investors and commissioners pass the buck back and forth between them?

Having been involved in commissioning services from voluntary, community and social enterprise (VCSE) providers for many years, I wonder if the problem for commissioners goes deeper than just a ‘hesitancy around impact’…

Perhaps it is a wilful misunderstanding caused by austerity and the need to make financial savings and efficiencies caused by pressures on the public purse?

In their desperation to raise income to replace lost government money, public agencies are courting partners who they think will bring in additional funds, and not necessarily giving social impact the proper consideration that it should be given.

Essentially, they see social impact as a means to draw in money without fully understanding what social impact means.

Furthermore, we could be heading for a situation where the Public Sector descends into simply becoming a ‘regulator’, diminishing their commissioning role completely. With the reduced strategic contracting capacity of a local and independent organisation with responsibility for public benefit, who will encourage social impact when all society’s ills have to be addressed purely by free markets?

Back in the days of plenty when I worked for Salford’s New Deal for Communities programme, we could afford to work with our providers to understand their impact and the outcomes that they were generating for us. We could even afford to provide training in the tools and techniques which are now part of the IMP.

Now we live in a vastly different world. With the increasing squeeze on public budgets, I am witnessing an appeal from the Public Sector to charities, social enterprises and ventures to bring in other money – grant funding and social investment – for services and activities which were previously fully funded by the Public Sector.  But why would people with money invest in these services – unless there is something for them in it?

In Salford, the amount of money flowing from the Council to the VCSE sector through contracts and grants has reduced by over 40% in the last 5 years. Our research shows that the middle is falling out of the sector – small community groups which rely on volunteers continue to thrive, their members driven by a shared interest in tackling unfairness, poverty and inequality in today’s society; and the larger ‘enterprises’, many of whom are national organisations or Public Sector spinouts, continue to succeed in contracting.

This leaves small and medium-sized ‘ventures’ caught in a spin between the Public Sector pushing them towards grants and ‘social investment’ as means of enhancing dwindling budgets; and social investment providers offering support for them to be ready to contract with the Public Sector.

I believe that the Public Sector doesn’t really understand that ‘social investment’ must get a return, just like any other form of borrowing, and social investors don’t really understand the state of panic in the Public Sector.

So, should this be where impact management fits in?

Public Sector commissioners want services, and they want outcomes. They want people to have better wellbeing, better lives; and ultimately, they need people not to need public services so much.

Social investors want many of the same things, but these outcomes must be measurable and accountable. They need to understand the financial and the social return, they may need to see financial growth, but ultimately the investment should be repayable in both social, and often also financial, impact one way or another.

So, a better understanding and management of the impact that a charity, social enterprise or venture is creating will help bridge the gap between the investors and commissioners.

And, I believe that it is also essential for their survival.

The NeuroMuscular Centre (NMC) in Cheshire has been part of the GSK Impact programme for several years. Over a 10-year period, NMC has kept social accounts, covering both the impact that the Centre is having for service users, their families and other stakeholders, and how it is managing the organisation in financial terms to maximise that impact.

NMC has a greater understanding of outcomes and impact; continuous dialogue with service users, funders and commissioners which takes places to prepare the social accounts; and the ability to accurately describe their impact in tenders, funding bids, and publicity. All this has helped this organisation triple its turnover and move from a position of uncertainty to one of a secure and rosy future.

By embedding social accounting and audit as a means of impact management, NMC has broadened its financial base, grown in size, and secured its position as the leading provider of services for people with neuromuscular disease in the country.

And who should pay for this impact management? I believe that if commissioners or social investors want evidence of ‘impact’ they should also have to pay for the work evidencing the impact…

In conclusion, there will always be a need for social and community organisations to take the heat out of the public purse – social accounting and impact management are probably the best ways for them to achieve this.

Social investors and Public Sector budgets will come and go, but the people who need support from charities, social enterprises, and other community-based organisations will always be there!

Ultimately, I believe that the essential driver for impact management should, therefore, be to achieve the best possible outcomes for the people (and/or the environment) that an organisation supports, and in doing so making it relevant, investible and successful for the long term.

Anne Lythgoe, Social Audit Network (SAN)
www.socialauditnetwork.org.uk 

Social impact and the argument against unqualified ‘growth’

In connection with business and the economy, we hear a lot about ‘growth’.

Economists argue that the economy has to grow year on year.  Investors claim that businesses have to continually grow as the alternative is for them to stagnate and get overtaken in an increasingly competitive market.  Even social enterprises are being pressed into ‘growing their business’ – usually in business terms such as increasing turnover, improving profits, increasing staff and, generally, expanding market share.  It would appear that the winners in the pervading and traditional economy are the enterprises that are growing and, if you are not growing, you join the losers.

I want to challenge that idea when it is applied to ‘social and community enterprises’.  I shall argue that social economy organisations are different from mainstream businesses as their core ‘business’ is achieving an essentially social or community goal.  Therefore, they should operate differently – making different decisions for different reasons – and ultimately judging their success or failure, not in terms of growth, but in terms of positive, qualitative social change.

I suppose what I want to say about ‘growth’ is not particularly new.  Barack Obama has said…

Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favors the few and not the many.
[Speech in Berlin, 24 July 2008.]

He was talking fundamentally about sustainability.  Interestingly, this contrasts significantly with Benjamin Franklin one of the Founders of the USA, who several centuries previously, stated…

Without continual growth and progress, such words as improvement, achievement, and success have no meaning.

Indeed, the context was quite different in Franklin’s time and the world was not hurtling towards climate change and potential environmental Armageddon.  Thus, the historical context matters in how we consider concepts such as ‘growth’.

In 2009 Tim Jackson wrote Prosperity Without Growth: the transition to a sustainable economy. The second edition, Prosperity Without Growth: foundations for the economy of tomorrow was published last year (2017).  In it, Jackson sees enterprise as a ‘form of social organisation’ with work representing participation in society where money should be used for the ‘social good’ – reducing inequality and supporting ecological stability.

This appears to me to be very close to what the pioneers in the social enterprise movement talked about.   There has to be an alternative way of looking at the economy which is inextricably linked to notions around creating zero waste through recycling and working towards a more ‘circular economy’.

I know of a number of social and community enterprises that responded to the urge to grow.  They have tended to assess their success in increased turnover, improved surplus or profit, and in recruiting more staff.  These are ways in which a traditional business measures their success and quantifies their achievements.   But what of improving the quality of the social change that happens as a result of what they do?  Is that to be sidelined in the drive for business success?

With community enterprises, in particular, growth can be difficult.  They are community-based, often operating within a particular locality, and with no intention of growing through domination or expanding into other areas.  They are often owned by the community to create community benefit on behalf of that very same community.  They want to get better at what they do and make a difference to local people by working closely with local residents.

The Scottish Government published its Social Enterprise Strategy earlier this year.  I was interested to see that it recognises the wide community-based nature of social enterprise in Scotland – often operating in financially perilous waters.  To its credit, it does not bang on about ‘growth’ and in terms of ‘scaling up’ social enterprises.  It states…

In increasingly competitive and uncertain markets, scale can be a weakness as well as a strength. For social enterprises, it may become increasingly preferable to scale capacity and impact through partnership rather than pursuing an organisational growth strategy. Collaboration, franchising, and replication will all come into sharper focus.

The last sentence of this quote is crucial.  It highlights the need for collaboration – implicitly in place of competition; and the role of looking to replicate practices in another place.

However, there lies a danger in both of these: collaboration is difficult to foster when funding and investment are usually distributed through highly competitive structures.  Similarly, replication is problematic due to varying contexts – what works in one place will not necessarily work in another, or certainly not in the same way.

Within the social economy, I believe, we should be doing enterprise differently and one example of this is that collaboration should be encouraged to replace overt competition.  Admittedly, this is a controversial notion and difficult to achieve but it is central to working together for the common good.

Another area where we should be doing things differently in the disputed arena of ‘social impact’.

Social and community enterprises trade in exchanging goods and services.  They do this to achieve a central aim of improving people’s lives; not adversely harming the environment; in changing behaviours or influencing cultural norms for the betterment and well-being of all.

So how do they know whether or not they are successful?

The Social Audit Network (SAN) has been working in this area of impact and subsequent accountability for a long time.  It believes that social enterprises should report on their social and community achievements on a regular basis.  At the same time, social enterprises should check on their internal aspects or social enterprise credentials.

In summary, these credentials are: being good to their staff and volunteers; being accountable through appropriate governance; not making individuals wealthy at the expense of the wider society; ‘washing their face’ financially; being environmentally responsible, and helping the local economy along…

SAN also believes that social reports should not be used primarily for marketing and that they should be subjected to some form of audit that checks facts and interpretations made in these reports.

Some form of social accounting and audit (SAA) is required urgently by the social enterprise movement.  SAA is an alternative way of doing things – recognising that working towards social change is a different aim, and cannot be measured in financial terms or in terms of business growth.

Social accounting is not about money.  It is, crucially, about how a social or community enterprise can be accountable – and importantly – held to account for what it is trying to do and what it is trying to be, in social, environmental and cultural terms.

In conclusion, I have always believed that in the end, the future of social and community enterprise will come down to how accurately they gauge their success and how they report this differently, but not entirely different, from traditional business.

We have to not only create a new way of seeing the world’s economy (as referenced in Prosperity Without Growth), by getting in place more appropriate mechanisms that suit an alternative way of doing business.  That includes social funding, social management, social accounting, social capital, social enterprise planning and so on…

So, ditch unqualified growth and get busy at doing things differently.  A possible New Year’s resolution?

Alan Kay
Social Audit Network (SAN)
www.socialauditnetwork.org.uk

Are we really creating ‘value’ and how do we know?

I attended two events recently and both got me thinking about the question in the title of this blog.

One was a seminar led by Stephen Osborne which examined the ‘value’ created by public services.  The other was the Social Audit Network (SAN) Annual Gathering.

Stephen Osborne is an esteemed and well-regarded academic at the University of Edinburgh Business School and has written extensively on public services.  He was speaking at Glasgow Caledonian University and three things struck me about his talk and the subsequent discussion.

The first was that delivering services in response to public needs requires a quite different approach from running a business that sells products. Apparently, legislation states that public sector organisations have a duty to respond to ‘need’ in the population. Some discharge this by delivering services, others commission or buy the services from others.

The key point is that the public sector must address ‘need’ which is evidenced in the population rather than creating demand for a service or product. In any case, the delivery of the service should use a ‘different business logic’ which is dependent on the co-operation and trust of citizens.  This working together and collusion is about adding value and positive change for citizens – in terms of meeting the needs, improving people’s quality of life, creating capacity within the community and generally making a better society.

The second was that public service delivery has fundamentally different values and a different end-game in comparison to running an enterprise.   The delivery can use business management methods to improve internal systems, but it is essentially quite a different animal with a different set of values.  This possibly has implications for social and community enterprises that also address social needs – they may need to look at their values as well as their financial bottom line.

The third relates to the discussion following the presentation, where there was a debate on accountability and the need to track, measure and report on whether or not the public service delivery was actually achieving its goals.  The verbal exchanges recognised that tangible and often measurable indicators can be used to explain what has been delivered and to what effect, however, the less tangible, outcomes in terms of happiness, confidence and self-esteem are harder to account for.

Osbourne said that these highly important factors require a more investigative approach and one that often is inevitably more time-consuming and more expensive.  It is interesting, in passing, that many local authorities have not re-instated previously abolished national performance measures – mainly due to cost.  There would seem to be an opportunity to set local and meaningful targets on ‘social impact’ which is happening in Salford and reportedly across Greater Manchester as part of the devolution agreement.

The SAN Gathering was held in Liverpool on 20^th October and was in two parts.

The morning looked at the basis of social accounting and audit and a number of case studies were presented which examined things that had worked well and others that were more of a challenge.  There appeared to be a general consensus that regular reporting on the change that happens as a result of what a social or community enterprise does, is a good thing.

The afternoon concentrated on how we can believe what is contained in social reports.

An increasing number of annual social reports are being written by a wide range of organisations – from the small community-based enterprises running lunch clubs to the mega-corporate bodies providing a range of social services – both often under contract to, or at least working alongside, the public sector.  With more and more organisations being contracted to deliver services for citizens in our society – how do we know they are doing a good job?

Looking at unsubstantiated and unverified social reports makes me concerned that self-reporting as advocated by approaches such as social accounting, may descend into purely marketing exercises.  There must be some kind of ‘audit’ of social reporting to ensure faith in, and the rounded integrity of, social reports.

Over many years SAN has worked with social, voluntary and community organisations in developing a ‘social audit process’ where qualified SAN social auditors chair a Panel meeting which is a learning and supportive process as well as providing rigorous and robust scrutiny of an organisation’s social report.

The afternoon session at the Gathering also considered standards for audit processes and in particular, the forthcoming BSI standards for social value assessment reports were mentioned.  This has to be welcomed as a way of ensuring that social organisations are not pedalling ‘fake news’.

A nagging concern, however, is that standards will be created by umbrella bodies without the active involvement of organisations on the ground – things will be done to people and grassroots organisations rather than with them.  In applying national standards across the board, there is a significant danger of turning the ‘social audit’ into yet another tick-box compliance exercise, especially if it is controlled by a national standards institute.

In conclusion, I want to tie these two events together as in my mind there would appear to be common threads.

• ‘Value’ for society is being created, but as a society, we need to be able to track it and in doing so, we need to see the degree of value created and how to improve on it, thus being as effective as possible.
• Self-reporting is the only practical way of tracking change created by the expanding plethora of different organisations that soon will be delivering all sorts of public services – either off their own bat or on contract to the public sector.
• We, the public, need to have faith in the social reports and one way of creating this is to insist on some form of ‘social audit’.
• Standards have to be established for the ‘social audit’ to ensure a procedural uniformity – but those standards should not be created in a vacuum but in some form of co-creation with social and community organisations. Thus, ensuring that they are understandable, transparent and trustworthy – and perhaps there is an opportunity to recognise the context with local measures.

Finally, there would appear to be a considerable degree of consensus within the public and social sectors on the need for social reporting – not only of the tangible but also the intangible.

There is wide recognition that there has to be some form of check or audit to ensure that reality is reflected in the reporting.

My plea is that in setting social audit standards they are not too complicated but are understandable and accessible (in all its meanings).  Only that way will they become accepted and adopted by all.

Alan Kay – Social Audit Network (SAN) www.socialauditnetwork.org.uk

 

Social Impact reporting – ‘truth’ or ‘covfefe’ ….

‘One of the key dangers facing society is the lack of trust and belief in experts, in government and in one of the cornerstones of Enlightenment thought; verifiable facts’

(Gavin Esler, 2017 Magnusson Lecture, Wigtown Book Festival)

Esler summarised succinctly in his lecture the ‘trust gap’ between reality and media, both in the US and here in the UK. What can really be relied upon to be ‘good news’ and what is ‘fake news’ made up to strengthen a point, cover up failings, or stir up feelings, for example?

And the same is true in the social economy sector in social impact reporting….

‘Social Value’ and ‘Responsible Business’ practices are increasingly popular across all sectors with the number of social value accounts, social impact reports, community accounts and so on being published every day on the increase (I know; I wrote one of them for Salford City Council recently).

So how do we know whether the ‘social impact’ we are reading about is truth or ‘covfefe’, (as Donald Trump put it recently)?

‘Despite the constant negative press covfefe’ (Donald J. Trump (TWITTER @realDonaldTrump) May 31, 2017)

A Flexible Approach to Reporting on Social Impact

In the last 10 years or so, numerous organisations have been set up to provide toolkits and offer support and advice on producing social impact reports.  The Social Value Act (SVA) 2012 was like an injection of steroids into the sector and we now probably have more organisations offering consultancy and information than we can usefully make sense of.

For many organisations seeking to report on their social purpose there is now a bewildering array of options to choose from – making it difficult to see the wood for the trees. The SVA and recent procurement policy guidance requires organisations to demonstrate their social value as well as reporting on their financial capability.

What many people probably don’t realize is that the antecedents for reporting on social value and social impact stretch back to the 1970s when the term ‘social audit’ was first used. Social Audit Limited was a company formed at that time to consider using ‘social audit’ to outline the effects of large factory closure on local communities.

‘Social auditing’ was then further developed by Freer Spreckley and his pioneering work with Beechwood College in Yorkshire in the 1980s, producing the first social audit toolkit.  In the late 1980s the Community Business Movement in Scotland extended this work to community enterprises – John Pearce and Alan Kay amongst the prime movers in this work – leading to the establishment of the Social Audit Network (SAN).

The 1980s was Thatcher’s decade, and the idea of demonstrating social value was counter to the strict Conservative Party policy of financialising pretty much everything.  A great deal of experimental work was carried out in Scotland between 1980 and 2003 when the Social Audit Network was officially launched; seeking to demonstrate that it isn’t just money that matters.

I recently attended the Social Value UK (SVUK) Members Exchange meeting in Birmingham (November 2016), where there were representatives from practitioner and social impact reporting services organisations.

I participated in a round table discussion of about 12 people at the meeting exploring how the information produced for the quality assurance and management of organisations could be integrated into social impact reports.

We know that some community and social enterprises already provide data to meet the requirements of quality assurance/management bodies such as PQASSO, European Foundation for Quality Management (EFQM), Investors in People & the Matrix Standard. A number of them use the SAN Social Accounting and Audit (SAA) framework and included this data into their social accounts.

We also know that some organisations using the SAN framework include Social Return on Investment (SROI) type analysis on some part of their activities  – most notably Birmingham Council of Voluntary Organisations (BCVO), All Saints Action Network (ASAN) in Wolverhampton and Five Lamps in the North East and Yorkshire.

There were probably as many consultants as practitioners at the Members Exchange meeting, and that left me wondering whether practitioners – particularly those that SAN has traditionally represented, voluntary and community organisations and social enterprises – are sometimes overwhelmed by the amount of information available to report on social impact and confused about which approach would best suit their needs.

In terms of finding a suitable approach to reporting on social value and impact, it seems to me that there are a few fundamental questions to ask;

• What is the purpose of producing a social impact report?
• Who is going to see it and what use can they make of it?
• Does it need to be complex or could it be done relatively simply?
• What detail is needed to satisfy the stakeholders?

Organisations that use SAN’s social accounting and audit framework like the flexibility to include an array of different tools in their reporting. They can draw on existing quality assurance/ management information AND include a SROI element to dig deeper into financial returns if they choose to.

The point is that the SAN SAA framework offers the flexibility to use different tools and data in the reporting of both performance and impact. 

Additionally, SAN uniquely has a network of accredited social auditors who can be contracted to audit the social accounts. At a time when demonstrating social value is becoming an increasingly necessary requirement, the independent auditing of the accounts is a vital component of verifying the authenticity and validity of the information, provided in much the same way as financial auditors do with financial accounts.

Sean Smith, SAN Director and West Midlands Regional Coordinator www.socialauditnetwork.org.uk 

Social impact reporting and marketing: a hazy divide?

“Marketing is manipulation and deceit. It tries to turn people into something they aren’t – individuals focused solely on themselves, maximising their consumption of goods that they don’t need.” Noam Chomsky

It is a powerful quote from Chomsky and not one that I entirely agree with as I feel that businesses have to promote and sell their products in the competitive environment which is part of our prevailing economic system.

The whole idea of marketing reminds me of a time I was wisely told by a colleague that there is often a difference between what people say they are doing and what they are actually doing.  This brings me to the main thread running through this blog which is the relationship between ‘marketing’ and ‘social impact reporting’.

In some ways it comes back to why should social and community enterprises regularly report on their performance and their impact on people, the environment and on the society in which they exist.  They do not have to.  So why do they?

Often social enterprises will say they are doing it in order to market what they do and to be able promote and ‘sell’ what they can provide – ‘selling’ it to investors or funders and other stakeholders.  This is quite legitimate and to be applauded but I would argue should not be the sole reason to report on social impact.

The last few decades have shown a huge and pervading expansion and emphasis on ‘marketing’.  Entrepreneurs starting out or wanting to expand will come up with a ‘product’ and then spend an inordinate amount of time, resources and energy to try and sell that product in the market.  Arguably, organisations with a central social objective should by definition not need to spend as much on this, as they should be responding to a social need and through their activities provide for that need to those that benefit from their work.

The area where social impact reporting and marketing meets manifests itself in Corporate Social Responsibility (CRS) reporting.  It is admirable and to be encouraged that businesses report more holistically and include the positive impact that they are having on the environment, on people and on the wider culture.  But this is basically philanthropy.  Their core business, if you like, is to maximise profit for their owners or founders.  They also have wider impacts but they remain secondary to their core purpose.

Social enterprises, on the other hand should be reporting regularly on their core business with is positive social change.  Social enterprises should be assessed and judged on how well they are achieving their central purpose and the impact they are having.

Social impact reporting should not only be used for marketing but also to contribute to planning, to the management of the whole organisations, to review what has worked and what has not, to understanding priorities, to involve processes that listen to stakeholders, to understand costs and outcomes of differing strategies, and so on.  It is about reporting and accounting and not just a way of providing marketing information.

Social Accounting and Audit takes organisations through a process that asks for a regular review of the mission, values and objectives alongside an analysis of stakeholders (all those individuals and organisations that can affect an organisation and are affected by it).  It requires an ‘impact map’ identifying outputs and outcomes to emerge from the activities of an organisation.  This is followed by collection of quantitative and qualitative data that is brought together in an annual set of draft social accounts.  The social accounts should seek to accurately reflect the performance and impact of the organisation during the past year.  This ‘account’ then is subject to an independent audit and the revised draft becomes the social report.  The process runs parallel to the financial accounting and audit process.

A social report for social and community enterprises is about proving what your organisation has achieved – backing up the claims with evidence; improving as an organisation as inevitably decisions on the future will be based around hard facts; and finally, and this is of increasing importance, about being accountable to all stakeholders.

It is important to recognise that the audit checks the thoroughness and veracity of reporting and does not pass judgement.  The judgement about performance and impact is left to stakeholders and the report should be openly disclosed to them.  They then make a judgement about the organisation.

Some organisations going through regular social accounting and audit consider the final report as of huge importance.  I would argue that going through the process is equally important.

It would be a mistake to think of social impact reporting only in terms of how it can be used to market the organisation.

The quote from Chomsky at the start of this blog reflects the cynicism around marketing – claiming that it is only about businesses trying to persuading people to spend their money.

Social and community enterprises are more about responsibly and regularly reporting on how they have effected change that contributes to benefits for people and the wider society.   In social reporting what an organisation says it does should be as close as possible to what it actually does.

Telling people about what an organisation does is one thing; but doing this in order to sell more and more products and services is another…

…and never the twain should meet…

Alan Kay

Social Audit Network (SAN) www.socialauditnetwork.org.uk

Measuring social impact ‘is like quicksilver in the hand’

I was at a conference recently about the future of Volunteering where discussion arose about how to measure its impact. Representatives from volunteering organisers complained about the problem of commissioners expecting longitudinal measurement of the social impact of volunteering, when this is something that varies and changes on a day to day basis. This made me think of Dorothy Parker’s quote about quicksilver.  ‘Leave the fingers open and it stays. Clutch it and it darts away’.

I learned that most people, especially the young, volunteer for a short period of time, or just for a one-off event. Tracking the difference that this has made for them and for society is nigh on impossible. (…and certainly would involve a huge amount of effort).

So if commissioners need to know the difference that something as ever-changing as volunteering is making, can this really be done? Should we clutch the quicksilver and try to make it fit into a box of metrics, or leave the hand open and watch it change?

The whole problem of tracking change over a long period of time is not being addressed by most social impact measurement approaches, which take a ‘snap shot’ or try to clutch at the truth of the impact (not always capturing the true picture and certainly not understanding it in the medium to long term…)

So I have two suggestions – one for the volunteering organisers and a follow-up for commissioners;

Organisers – look to the use of social accounting and audit, which at least tries to track social impact over time due to the regularity of the process… Use a repeated and robust measurement system as part of your daily business, and keep it there.

Commissioners – would you accept the ‘passporting’ of evidence about social impact. or learning from evaluation between projects if there was a robust social accounting system in place? Rather than expecting measurement in minute detail for a provider to receive payment, would you be happy if observed and assumed impact/outcomes could be shown in the longer term through independently verified social accounts?

Dorothy Parker’s original quote was about Love. I also learned that people volunteer because they care about something! Let’s not put them off by stifling this caring with form-filling and over-zealous counting of what they do.

Anne Lythgoe is Manager of Policy and Partnerships at Salford City Council and is supporting a partnership between the public and VCSE sectors in the City and Greater Manchester. More information can be found at www.salfordsocialvalue.org..uk

Anne is also a Director of the Social Audit Network. www.socialauditnetwork.org.uk

Twitter: @anne_lythgoe

Looking into the future development of social impact…

‘When eating an elephant take one bite at a time’ Creighton Abrams

Not without a great deal of hesitation, I want to try and look into the future and try and ‘see’ the future development of social enterprise and more particularly the role of social impact.  In attempting to predict how present trends will unwind in future years is a fairly dangerous game and one that is setting oneself up for a fall.  But here goes…one bite at a time.

As far as context goes we are living in an increasingly connected world with a globalised market.  Governments have shrinking control over the wider economy as large privately owned corporations play a more influential role in the shift from public sector to private ownership. Collective working and organised mutuality are frowned upon in the belief that society exists as the sum functioning individuals.

Over the next decades there will be increased inequality, a decrease in forms of united action by trade unions (or equivalent), welfare will become more dependent on philanthropy and at the behest of the super-rich, personal debt will rise and will continue to be used to control the mass of the population.  And despite the UK voting narrowly to stay in Europe there will be a rise in a destructive and xenophobic form of nationalism – dividing the ‘us’ from the ‘them’.

Amid this turmoil sits what can be referred to as the ‘third sector’.  This includes civic society, volunteering, business with social purpose, community development, clubs and societies.  In times gone by they might expect some form of support from the state as they aim to improve social and economic livelihoods.  In the future their funding will become more and more difficult and they will be pushed into working alongside and with private sector institutions.  Some of these institutions will be benign but some will expect the third sector organisations they support to ‘toe the line’ and act in their interests.

Some of the more established, and it has to be said, bigger voluntary enterprises will survive and grow at the expense of smaller organisations.  This will happen as competition rather than collaboration is encouraged and sanctified by the dispensers of funds and capital.

However, within this bleak landscape, I think there will be a counter swing at a local level.  As services to communities are gradually withdrawn, local people who are concerned with their community’s future will react by forming local multi-functional community based enterprises intent on improving the ‘good’ of the community.  The future of ‘social enterprise’ will be community.   It will be based on local mutual self-help and in a way that erases the divide between ‘economic’, ‘social’ and ‘environment’ impacts.  Instead it will try to address all these three aspects for the benefit of their particular community.

Essentially, there will be a split in the ‘social enterprise’ sector – and indeed the term ‘social enterprise’ will become more and more meaningless.  There will be large competitive organisations taking on government contracts alongside the private sector and they will operate so well in the market place that the difference between them and privately owned businesses will be academic.  Then, in the alternative direction, there will be the community-based enterprises hanging on to socialist and collective principles in the belief that solidarity and a sense of belonging can provide for the good of all.

So where does ‘social impact’ fit into all of this?  Looking into the crystal ball of the future, it is necessary to consider the past.  In the mid-2000s, just as social accounting and audit was beginning to gain traction, along came a US import in the form of Social Return on Investment (SROI).  It burst on the social reporting scene but over the years it has been increasingly criticised as an approach.  It is changing its spots and recognising that monetisation of outcomes is not an absolute necessity in measuring the impact social enterprises have on stakeholders.

In the future this trend will continue and there will be a gradual realisation that the focus in this area should be on regular and systematic reporting by all organisations that want to demonstrate to themselves and others the positive social and environmental changes that happen as a result of their activities.

Over the next decade, the split in the social enterprise ‘movement’ will be mirrored in a ‘split’ in the world of social impact.  On the one hand there will be an industry around social reporting with an array of tools, structures and off-the-shelf aids to help organisations report on their social impact. Despite this there will be confusion and a call for standardisation.  I should imagine Social Value UK and others will be at the forefront of this call – and possibly quite rightly.

On the other hand, there will be community based enterprises, operating at a small and local level who will look to report not only on the impact that they have but also on the type of organisation they are, their ethical credentials, and the way they deliver their impact.

This is where the Social Audit Network (SAN) comes in.  SAN was set up to support organisations in the community sector.  It was established to help organisations account for how they delivered change as well as the degree of change that happened as a result of what they did. In the past and currently there has been an emphasis on this two-fold approach.

In the next decade, I think there will be a shift to emphasise the auditing of social reports – and not so much on how social reporting can be done.

As the decade pans out, more and more people will realise that social reports can be written in many different ways while the developing standards should be around the audit process.  You can evaluate enterprises that have a social purpose with clever consultants going in and writing a report.  This is not sustainable in the short term and actually dis-empowers the enterprise.  Far better to get the organisation to take charge of its own monitoring and evaluation and then get it externally verified through a thorough and well-constructed audit.

SAN currently has a set procedure for the audit.  A set of criteria has been developed based around the principles of social accounting and audit.  All reports will be expected to include:

• What the organisation is all about (Vision, Mission, Values, Objectives, Activities, expected Outputs and outcomes) and who it works with and for (stakeholders)
• What the social report covers and what was done (Method, Scope, Omissions)
• A checklist on internal functions or key aspects (Human Resources, Governance, ‘Asset Lock’’ Financial Sustainability, Environmental, Local Economic)
• Report on outputs and outcomes (usually relating to the Objectives and through them back to the overall purpose)
• Key findings, conclusions and future recommendations

Where does this leave us?  I think the global outlook is pretty horrendous and capitalism continues to wreak havoc on communities, societies, cultures and the environment. The glimmer of hope is through community action which will include community-owned enterprises and businesses.  But they want to know they are making a positive difference.  How do they do this?  I would argue through adopting and gradually introducing a form of social accounting with an audit attached that provides external and peer review to help them regularly keep track of what they do and how they do it.

We shall not be able to eat an elephant with one gulp – instead it will have to be eaten in small bites… (I can avow it was certainly not the elephant that said this!)

Alan Kay Social Audit Network (SAN) www.socialauditnetwork.org.uk

The art of making social impact interesting…

Lots of people have heard of ‘social accounting and audit’ but they are not sure what it actually is and what it entails.  Rumour often has it that it is complicated and involved.  However, I would argue that it actually is quite simple…

…you re-assert what you, as an organisation, aims to do and how whilst at the same time identifying who you are working with and for;

…you collect information – both quantitative and qualitative – to see if you are meeting your overall purpose;

…you bring all that information together, usually (but not always), into a report; and then…

…you get it independently checked to provide the report with integrity.

Thus, four easy and simple steps with the last one being the ‘audit’.

I believe that there is no getting away from having to apply the first three steps.  In the last few years there are an increasing number of people and institutions reformulating these steps in different ways – adding to what seems like a confusing plethora of different approaches.  The contrary is the case – they are all very similar and all maintain the three steps albeit dressed up in slightly different packages.

In introducing some form of social impact assessment into your organisation, be conscious of where it is ‘located’ within your organisation.  Often organisations will tack it on as an additional activity as can be seen in the diagram on the left – an add-on that may persuade funders to continue to support the organisation.

The real trick – and the thing that makes a difference in adopting an integrated social impact process, is to try and ‘locate’ social impact at the core of the organisation as in the diagram on the right.  This will mean that social impact assessment is an integral part of what you actually do.  This can then contribute hugely to planning, reporting, as well as decision-making – it can have multiple uses.

Moving social impact into the centre or your organisation requires a bit of thought and planning but it means that the process of collecting data becomes part of what you do and not seen as an ‘extra’ to what you do.  In many ways this relates to the way we learn which is epitomised by the Kolb Cycle (see diagram below) where we bring forward a concept, test it out, experience the change, then reflect on that experience and this leads back into new forming new concepts.  Social impact for organisations resides in the reflective part of the cycle.

So far I have tried to show the process of social impact and where that process lies within an organisation that is trying to make social change.  But why would we want to do it?  For me it is really about seeing if you, as an organisation, are really making a difference.  And if you are, can you prove it and thus can you improve as a more effective organisation.

Within the world of social impact there is a lot written about measurement.  What cannot be measured easily is often ignored – but many of the social changes that an organisation with a central social purpose aspires to achieve, are difficult – if not nearly impossible to measure.

So should we be trying to measure them at all?  For the purposes of assessing the social impact you are making, is it not sufficient to assess as fairly as possible whether or not you are making a difference and to what degree?

Back in the 1970s I remember reading Zen and the Art of Motorcycle Maintenance.  Many people had it stuffed in their corduroy jacket pockets to take it out to impress people on trains and such like.  Despite using it as an accessory, it is an amazing book and much of it is about how we understand quality.  This is not an easy thing to do and the book illustrates how we seem to understand quality without being able to measure it – just like many things in life that we truly value. An illustrative quote typical to the book is…

Quality… you know what it is, yet you don’t know what it is.  But that is self-contradictory.  But some things are better than others, that is they have more quality.  But when you try to say what the quality is…it all goes poof!

So this leads us on to reporting your social impact – not only on the quantitative data which is relatively easy to understand – but also how to consider the qualitative data.  In the social accounting and audit process there is a recommendation to collect qualitative opinion and views from several different stakeholder groups.  This multi-perspective approach (which in academia is referred to as triangulation) means that if you are more or less getting the same sorts of views from different groups’ perspectives then you can be reasonably sure you are getting closer to the truth.

Let’s go back to the original title of this blog. How can we make social impact, not only more relevant by placing it at the core of the organisation, but also interesting to do and interesting for participating stakeholders?

I was recently involved in supporting the GENERATION Co-production programme and helped them keep social accounts on their outcomes.  This outreach programme worked with five separate arts projects across Scotland – all of them exposing young people actively to the creative arts.  The programme lasted almost two years and what was really interesting was that the social accounting process used the medium of art itself in collecting qualitative information from the young participants.  Instead of the traditional questionnaires/interviews/events/etc., young people were invited to draw pictures and ‘storyboards’ of their experiences.  They were then filmed telling their stories and all the information was put up onto a website.

This illustrates how the consultation with stakeholders can be integrated into the core of what the organisation is trying to do.  Similarly, different types or organisation can find ways to integrate the consultation process into the delivery of their initiative.  It is not outside the bounds of possibility for nurseries and schools to have evaluative games, for those holding training or events to have dialogue sessions on assessing change, for sports clubs to have physical challenges in obtaining feedback and so on.

This thinking and subsequent implementation means that the social impact process becomes part of what you do and not just an add-on.

At the end of the GENERATION Co-production programme the social accounts were, however, written up in a more traditional report form but they drew on the information collected on the website.  Both the final detailed report and the illustrative summary will be publicly available soon.

In conclusion, in working to encourage organisations to adopt a social impact framework we have to encourage them to pull the process of social impact into the centre of the organisation – a crucial and integral part of what the organisation is actually trying to do.  At the same time organisations should explore how to consult on the quality of their services in a way that is appropriate to what they do…Eureka!

Alan Kay, Social Audit Network (SAN)

www.socialauditnetwork.org.uk