Tag Archives: social impact reporting

Social impact: should we be talking process or product?

I was reminded recently of the story about Jason and his quest for the Golden Fleece.  It is the well-known story of a young man with a goal in mind but in order to achieve that end, he has a long, challenging and arduous journey.   It was an adventure, and throughout the journey Jason grew as a person, became wiser, tackled problems and overcame obstacles.  Although the final product was obtaining a prize, the process involved in trying to attain the prize was equally important.

The lesson learned from this story being…the journey is as important as the destination.  In today’s media parlance – we were on a journey and it was a bit of a rollercoaster but we got through it!

With a bit of a stretch of the imagination it is similar with social impact reporting.  The activities that are done to understand the degree that one’s organisation is making a difference can be as important – if not more important – than the resultant social report.

I have been involved with social accounting and audit for many years.  Working with others, we developed a PROCESS to help organisations collect relevant quantitative and qualitative information relating to their central purpose.  This happens each year in the same way that financial accounts and ‘books’ are kept.

Organisations then bring this information together and report on their performance and on their impact on their stakeholders.   The process is internal to the organisation, owned and controlled by the organisation – thereby empowering it to self-monitor and self-evaluate.

At the end of a year the organisation will produce its own social impact report – this is the PRODUCT.  Thus. the process can be regarded as the ‘journey’ and the social report is the ‘destination’.

With social accounting and audit there is a wee sting in the tail in that the product is externally verified with an audit – again similar to financial annual accounts.  The audit ensures that the final product of the report is valid and a true interpretation of what the organisation has, and has not, achieved during the year.  On passing the audit, a statement is issued – not golden fleece I am afraid – just a signed certificate.

Organisations who regularly keep a set of social accounts and subject them to audit report a number of significant benefits.

The PROCESS helps them understand more clearly what they do to achieve an overall purpose; it forces them to listen to a wide range of different stakeholders; it can keep them on track; it can help them in explaining more clearly what they do; it can be used in organisational record-keeping and learning; it can get people to work together more effectively; and so on.

There are benefits too from producing a report – the PRODUCT.  It can be summarised and distributed widely to stakeholders and the wider public; it can be used to report back to funders; it can be the basis for future planning; it can track change that an organisation has had to deal with; it can be used, in part, to brief outsiders; and so on.

So in social accounting and audit both the PROCESS and the PRODUCT have value.

The Social Audit Network (SAN) was set up to help third sector and community organisation to introduce social accounting and audit into their organisations – and to help them with the process of social accounting as well as producing a social report.

Within SAN we often have the debate – is process more important than the product or vice versa.

I fall more into the process ‘camp’.  For me the final report does have value and I can see the advantages of having the statement endorsing the social accounts.  But it is going through the process that can have a more influential effect on the organisation.  It can help all parts of an organisation not only to take stock on a regular basis but also to reflect on what the organisation is trying to do and how it is doing that.

So many social and community enterprises see a need, respond to it, try and address it, and then get caught up in delivering whatever it is that they do.  Building into the annual organisational cycle a process of data collection and stakeholder engagement to quantify outputs and to understand and to be able to report on outcomes, can be hugely beneficial.  Is the organisation doing the best it can?  Could it be doing something better or more effective? How can it change? How can it plan to improve?

The folk in the product camp stress the value of a report in that it can be used as the central document in an organisation.  It can be used to prove or evidence the work that has been done by the organisation in achieving its ends.

Now if you are a process-type person, you have to be able to accept that processes can be messy.  Through trial and error…and trial again, one learns – and through that learning a deeper understanding begins to emerge.

In researching this blog I came across a website – Prek and K Sharing which deals with working with children to create art.  They argue that in encouraging art the PROCESS of doing is more important than the final PRODUCT.

In the picture below the process is messy and undefined but reflects the learning, while the well-structured neat product is more presentable and more accepted.

process-product

It is the same with social impact reporting.  The process of collecting, collating and making sense of information and opinions can be messy – while the learning from it can be immense.

So which would you choose?  The process (read Jason’s adventurous journey) or the product (read ‘golden fleece’) or both…

Alan Kay – Social Audit Network (SAN) – 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