Making social accounting relevant for you….

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.

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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 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)

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