Over the last couple of months, I have had the pleasure of speaking at several events where ‘social value’ featured strongly on the agenda.
In Liverpool, the Social Audit Network Annual Conference examined how social accounting can support civil society organisations to tackle poverty….
In Edinburgh, at an event convened by Community Enterprise, social and community enterprise organisations debated the changing practice of social impact measurement….
If nothing else, the Social Value Act has led to an explosion in the number of ‘tools’ to measure social value…
Social Value UK offers 36 online tools and software to help people like you and me use in accounting for and reporting on social value. The Social Value Hub, hosted by Social Enterprise UK, includes a vast range of tools, case studies and advice about measuring social value and the Inspiring Impact programme has many similar resources available. Continue reading Making social accounting relevant for you….
In his recent blog for the Social Audit Network (SAN), Alan Kay sent out a rallying cry to the social economy:
‘I think that social enterprises should be looking seriously and overtly at the degree to which they contribute to social capital. This would mean putting in place how they build trust between people and organisations; how they encourage reciprocal working and mutuality; how they state and then live up to their values; how they support a commitment to a community and a sense of belonging; and how they actively create connectedness through informal and formal social networks. Continue reading Social accounting should be about good organisational practice, not just a tool for measuring social value…
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 20th 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.
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
‘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) Continue reading Social Impact reporting – ‘truth’ or ‘covfefe’ ….
The increasing interest in ‘social value’ has led to an expansion of the social economy, big corporates rushing to show their ethical credentials and public sector organisations publishing their policies and new procurement strategies for social impact…
But a swift review of these actions shows a worrying trend – we are starting to overlook the environment.
In England and Wales, the Public Services (Social Value) Act 2012 requires public bodies to consider how the services they commission and procure might improve the economic, social and environmental well-being of the area.
What is not widely known is that social value originated in response to environmental sustainability policy and practice. Indeed, in construction, the concept of sustainability has been ‘business as usual’ for many years.
I believe that in 2017 there is now a pressing need to focus on the places where people live, the environment around us and the resources that we use. Increasing population causes waste, uses natural resources and creates global warming…. Whilst politicians pull away from arguably ineffectual climate change agreements, the impacts of human activity on our planet and people expand in scale and depth.
We have already seen global warming rising by over 1 degree, and climate change is now leading to increasingly severe impacts – from rapidly melting sea ice at the poles and 50-degree heatwaves in India, to floods in Bangladesh and drought in California. The UK is seeing dramatic impacts too – with severe flooding in almost every region and country in the UK in recent years[1].
In Manchester air pollution causes over 1,000 premature deaths each year[2]. Local authorities spend billions of pounds each year dealing with waste. Fly tipping is on the increase. Energy costs are spiralling. Green belt land is being sacrificed to build homes…
I originally trained as a landscape architect and learned about how to create a ‘genius loci’. Gardeners such as Capability Brown created spaces where people wanted to be and felt happy; a sense of place that makes people feel good. It’s not really surprising that the happiest place to live in the UK is the Outer Hebrides.[3] Away from all that pollution so common on the mainland, in a beautiful landscape, with renewable energy schemes and pride in the local environment. But even this idyllic life is under threat from sea level rise.
So, if our planet is suffering, and our people’s health and wellbeing is at risk; how can we reverse the trend of ‘social value’ being only about jobs, training and doing local business? (Surely these are really economic factors anyway?)
Instead of ‘socio-economic’, should we be thinking about ‘socio-environmental’? We may be helping people to access employment, but are they physically and mentally healthy enough to stay in these jobs?
Perhaps it’s time for a renewed look at ‘think global, act local’ – many little things done near to home can make a difference. But we now need more of the difference to be made closer to home as well as for our planet.
If ‘social value’ must include environmental benefits – as the legislation states – then using the Social Audit Network’s www.socialauditnetwork.org.uk social accounting methodology is one way to prove the positive benefit that you can have on the environment; to manage and improve your performance; and be accountable for this to your stakeholders – and the planet.
SAN resources include a simple ‘green office checklist’ and tips on how to calculate your carbon footprint. There are many simple online tools available for tracking environmental measures.
Being accountable for environmental measures is a compulsory element of the SAN methodology. We have been challenged for this. Why should an organisation which is set up for a purpose such as providing training opportunities for young people have to report on its environmental impact?
The answer is because the organisation might use natural resources and energy, create waste or pollutants, employ staff who travel; and because those young people might be living shorter lives affected by air pollution, in an unpleasant and dirty neighbourhood, unable to afford to heat their homes. AND because we are heading for a climatic emergency – over 3 degrees warming – and we all will need to do everything that we can to protect humanity from catastrophic levels of climate change.
Anne Lythgoe, Social Audit Network – info@socialauditnetwork.org
[1] Friends of the Earth 2017
[2] Public Health England 2015
[3] Office for National Statistics 2016
Legend has it that the King of Siam once gave rare albino elephants to courtiers who had displeased him, that they might be ruined by the animals’ upkeep costs.
These days, the term ‘white elephant’ more often refers to an extravagant but useless gift that cannot be easily disposed of or serves little purpose, or perhaps a beautiful but functionless building that nobody visits….
A few weeks ago, I spoke at a conference for social enterprise organisations. I work in local government, so I talked about how commissioners of public services are increasingly looking for the ‘social value’ which a business in the social economy might bring. I was followed by three speakers from the private sector, all of whom had committed to ‘buy social’ and include social enterprises in their supply chains.
A group of local social enterprises spoke about their good work and the social impact that they were creating through activities ranging from support for people with mental health problems, disabled young people being able to visit the beach, to training for families to eat healthily and take more exercise.
All valuable and necessary goals in local communities.
After the conference, one of my private sector colleagues confided in me that he was struggling to purchase from social enterprises because they just didn’t sell the things that his company needed to buy…
And I thought about my own experience of public sector commissioning and how few of our contracts are placed directly with social enterprises (despite my employer having put a great deal of effort into trying to do so).
So, what is going wrong? Why are some social enterprises more successful than others?
Although the private and public sectors often want to buy goods and services from organisations with a social purpose, perhaps they can’t directly buy the social value or social impact that those organisations are keen to sell? Buyers want to purchase a product and get the social value ‘added’?
Maybe the social enterprises that ARE successful have found a way to sell products which by their very nature create social impact? Maybe they understand their market as well as their social value?
NMC Design and Print is an enterprise linked to the Neuro Muscular Centre in Winsford, Cheshire. NMC has used its social accounting http://www.nmcentre.com/nmc/about-us/social-accounts/ to engage with its market and create a commercially successful social enterprise providing a Design and Print service run by, and employing, designers with muscular dystrophy.
The products that they are selling include graphic design, other digital services and printing. The ‘social value’ comes with the fact that people with muscular dystrophy, who would otherwise struggle to find employment, provide these services.
NMC knows and engages with its market, understands its social value and has expanded rapidly.
See Detail is a company that makes the best use of the skills of the staff to provide services that are exceptional and rewarding for everyone. In addition, they provide autism awareness training to the companies and organisations that they work with, and finally they are lifting people out of the, so-called benefits trap, and making a real contribution to society both in terms of wealth generation and in innovation and creativity. See Detail’s main business is software testing which people on the autistic spectrum are ideally suited.
Both NMC Design and Print and See Detail have managed to combine their business model and their social impact to create a commercially successful social enterprise. They have ‘packaged’ their social value for their own specific market. Sadly, many ‘social enterprises’ that I come across have not managed to do that.
Instead, social value dominates their purpose. This might be too specific or on too small a scale to be beneficial to prospective customers and the ‘enterprise’ ceases to be viable. A ‘beast’ is created which is valuable to a discrete group and often outwardly impressive but which is impossible to sustain and not really wanted by those with the means to pay for it.
So, my ‘take-away’ messages to social enterprises everywhere are;
Anne Lythgoe
SAN Vice- Chair
I believe that Social Accounting and Audit (SAA) can be a framework for accountability and reporting, which, if used to support public procurement, will enable devolution. Despite the current move towards greater control of purchasing by central government in Westminster, SAA can be a way to make devolution work.
Devolution is commonly understood to be the transfer of functions previously exercised by ministers and the national parliament to a subordinate elected body on a geographical basis.
In Greater Manchester (GM), we have been leading the way. Budgets for health and social care, planning and housing, business support and low carbon technologies have been entrusted to sub-regional level by Government.
Furthermore, ‘social value’ is now enshrined in GM-wide Procurement Policy, and the need to maximise spending power for the benefit of local people – to achieve a social, environmental and economic impact – is recognised as a major way to ‘sweat’ public, private and third sector investment for the common good.
Over 10 years ago, at the New Local Government conference, David Milliband announced, ‘at the local level we need a stronger framework of opportunity and responsibility …. – in fact a double devolution, not just to the Town Hall but beyond, to neighbourhoods and individual citizens’.
The Office of the Third Sector (now Civil Society) was created and local authorities were encouraged to devolve the delivery of local services to local people.
But it didn’t quite happen like that…
What we have in GM isn’t a ‘double devolution’, but it is one where the voluntary, community and social enterprise sector has a strong voice. Words like ‘co-production’, ‘co-design’, ‘asset based approaches’ and ‘reform’ are used to indicate an evolving sense of, ‘we are all in it together’. The delivery isn’t yet devolved to local people.
At the heart of GM devolution is a need to make the local economy sustainable. It is recognised that if this is to work, voluntary, community, social enterprise organisations, neighbourhoods and citizens must be ready and able to take the opportunity and responsibility. And they must convince Town Halls that they can deliver. Maybe therefore, this is why the double devolution hasn’t really happened?
SAA is not a new concept, having been implemented in various forms and by a wide range of organisations since the 1970s. But there is a growing number of organisations in GM that have adopted this approach to help them measure their overall impact and quality by integrating the ‘proving – improving – and be accountable’ processes into their day-to-day operations.
SAA accurately describes what an organisation is achieving in economic, social and environmental terms, and allows it to demonstrate to others what its principle purposes are and what it does. It assesses social and community enterprises in a holistic way, incorporating both the views of everyone connected with the organisation and measuring indicators of its success.
The framework also includes independent verification, an audit process whereby the results can be proved to be robust and reliable, which can give confidence to both the organisation and the Town Hall looking to devolve responsibility or place a contract.
One of the main elements of SAA is the comprehensive involvement of an organisation’s stakeholders, and this can prove one of the most important reasons for procuring from the voluntary, community and social enterprise sector. SAA can demonstrate to health and other commissioners that service users and staff are indeed involved in the planning, operation and management of services from social enterprises.
Unlimited Potential (UP) is a social enterprise providing health and happiness services, which grew up in the Charlestown and Lower Kersal area of Salford.
Formed by residents participating in a local health task group, and now tackling health issues in partnership with local people, its work includes managing services at two local healthy living centres, health outreach services and work which addresses the specific health and happiness issues of local residents.
UP is very keen to prove its ‘positive impact’ as it develops a sustainable business strategy, and has used social accounting and audit to do this.
UP’s ability to demonstrate the benefits of its work through social accounting and audit, adds ‘value’ to public service commissioners who are provided with evidence of partnership working, involvement of local people in the design and management of services, innovation, responsiveness to local need and local ownership. This has contributed to UP becoming a nationally recognised and respected social enterprise.
SAA can be used to demonstrate individual and collective strengths, prove the sector’s competence as providers of public services, and meeting the challenge of taking local responsibility and citizen led action.
It can help devolution to happen.
Anne Lythgoe, Vice Chair & Treasurer/Finance Director www.socialauditnetwork.org.uk
‘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:
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
In Jonathan Coe’s book ‘Number 11 or Tales that Witness Madness’ one of the characters joins the ‘Institute for Quality Valuation’ that is intent on putting a financial value on practically anything and everything. The character is describing society in general when they say…
“We are dealing with people who have no notion at all that something is important unless you can put a price on it. So rather than have them dismiss…well, human emotion, altogether, as something completely worthless, I think it’s better if someone like me comes along and tries to help them out. Makes some sort of case for the defence. Se we’ve coined a new term – ‘hedonic value’ that might refer to, say, the feeling you get when you look at a beautiful stretch of coastline. And we try to prove that this feeling is actually worth a few thousand pounds…”
This is, of course, fiction and other characters in the book are skeptical at the idea of putting financial value on all things. But it is surprising how in a relatively short period of time the seemingly accepted way of assessing social impact for organisations with a central social purpose is to convert all their social outcomes into a financial figure.
This idea was first introduced into the UK by the new economic foundation who built on and developed pioneering work carried out by the Roberts Enterprise Development Fund in California. It was referred to as Social Return on Investment or SROI. This has led in the further development of the ‘social impact industry’ although there is a whole array of other measures which are forming part of that industry – such as ‘value for money’ figures, extending the role of Cost Benefit Analysis, and so on.
But should we really, as a society, be trying to put a financial value on all things? Certainly, to do this has a function. If you were a policy-maker and trying to decide how to spend restricted financial resources on, say, building more care homes for elderly people or putting the resources into taking care services to people in their own homes, you could then assess the costs, use an ‘impact map’ to identify outcomes, provide them with a financial value and finally work out the most cost effective path.
As a tool to decide on investment, it might work well. Investors like the idea of providing a more tangible value on things that, although valued, have not traditionally had a financial value put on them. Very often investors and funders want to know the ‘bang they get for their buck’ – what amount of ‘social value’ comes from their initial investment expressed in pounds and pence.
But my argument is that if this is what is required by investors then investors should be the ones that calculate the social return on their investment. It does not follow that all social enterprises should be encouraged to measure their success by using an approach that monetises all the outcomes from the social enterprises’ activities.
To go back to Coe’s entertaining book, the same character as before was trying to put a price on the myth (is it a myth?) of the Loch Ness Monster. Belief in the Monster does contribute to the tourist industry and you can translate the myth into some sort of financial figure. I would argue that that should be done by people wanting to sustain the myth and support the tourist industry. We do not put the onus on the Loch ness Monster to carry out an SROI! They, no doubt, are busy being monstrous…
We at the Social Audit Network (SAN) believe that although looking at the social return arising from an input of resources has a place, it is much more helpful for an organisation with a social purpose to keep an account of their performance and to try as much as possible to demonstrate their impact on people, the environment and the society more generally. Since the mid-2000s SAN has engaged with SROI colleagues, discussing and considering our different approaches, undertaken research which helped to shape underpinning principles to this whole area of social impact. However, whilst SROI has its place, for us there are a number of central reasons that make our approaches distinct. I would like to outline them here.
Firstly, context matters. Where a social or community enterprise is working and with whom, can matter tremendously. Therefore, within social accounting the contextual information is encouraged – as it provides background and explains more fully the social need being addressed.
Secondly, by requiring to put a financial figure on all outcomes, there is a tendency to see the solution to addressing the social need as financial. Often people working in the development of communities or in addressing a deficient social need will tell you that putting money into addressing these needs solves only part of the problem. A social need requires social solutions.
Thirdly, social accounting and audit tries to get organisations to address their overall performance against their objectives and does not only ask for the impact an organisation has. For us, it matters what type of structure and values an organisation espouses – and this should be reported on.
Fourthly, there is a danger in having to put a financial figure on all the outcomes in order to come up with a financial ‘return’. We believe that not everything can be valued in financial terms and the extensive use of financial proxies (which is often the case using SROI methodology) can lead to spurious claims and begins to move further away for a ‘real’ or tangible ‘return’.
Fifthly, although developing an ‘impact map’ of inputs, outputs and outcomes can be really helpful for a social enterprise to plan its strategy, carrying out an exercise in looking at the social return does not necessarily help the organisation to perform better. The SROI process is often very specific and focussed – whereas social accounting is more holistic and a broader approach – thus of more directly related to improvement.
Sixthly, the value for an organisation to regularly report on its performance and impact can be hugely beneficial when the organisation does it themselves. Many exercises in calculating the social return on investment are done by consultants and people outside the organisation. The real value of not only proving the impact you might be having, is also in improving through learning more about your own organisation and retaining that knowledge.
So where does this leave us? Certainly, reporting on one’s own organisation in terms of how well the organisation has performed and what kind of impact and degree of social impact one has had, is important. In the future it will inevitably become a requirement – particularly for those organisations in receipt of funding or investment.
The argument that SAN has, is that financialising everything is not a desirable avenue to be going down. A social enterprise should be assessing whether or not it is performing well and what sort of beneficial social change is happening as a result of its activities. But having to stick a financial value on all of that changes seems to us to be crazy.
There are other characters in Coe’s novel who listen to the reasons for monetizing social value and poke fun. I do not advocate this, but feel that putting a financial value on all the intangibles that make up a life is a diversion. Instead we should be supporting organisations that improve people’s lives and livelihoods and to report regularly on their performance and impact – more generally…
Alan Kay Social Audit Network (SAN) www.socialauditnetwork.org.uk
February 2016
Disclaimer: the views included in the above blog are not necessarily the universal views of the all the members of the Social Audit Network
Social Audit Network SAN 