Tag Archives: Social value

Social Value – why are we forgetting the planet?

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

Are social enterprises creating white elephants?

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;

  • don’t create white elephants, when dull looking, grey beasts are often stronger and more successful;
  • use tools like social accounting and audit to engage with your market, and
  • be very careful in the presence of Kings….

Anne Lythgoe

SAN Vice- Chair

Developing Devolution with Social Accounting & Audit

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.

ultd-potential

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

Understanding the principles and history of social accounting and audit

History is not another name for the past, as many people imply.  It is the name for stories about the past. A. J. P. Taylor

I increasingly believe that to understand why things are the way they are and why they are not something else we have to know about the past and try to understand it.

I am currently helping to advise on a research programme called CommonHealth which is co-ordinated by the Yunus Centre for Social Business and Health at Glasgow Caledonian University.  One of the really interesting elements of the research is a look back at what happened with the community business movement mainly in Scotland in the 1980s and 90s.  It is extraordinary how we interpret the past in different ways adding and detracting bits and pieces to fit our view of the present.  The past is definitely open to interpretation but, if we manage to be as objective as possible, it can help us see the present and the immediate future with more clarity.

One interesting aside, and an issue that has arisen within the research project, is that the years ‘post-internet’ are much more widely accessible than the time before the internet which is sometimes overlooked as it involves reports and archives on dusty shelves…

Involvement in this research has recently led me to think about the historical roots of social impact assessment – where it has come from.  In this blog I want to consider the reporting on impact and in particular the historical development of the principles around social accounting and audit.

Long before the establishment of the Social Audit Network and back in 1993, Community Enterprise Lothian (who I worked for at that time) worked jointly with others to hold a conference in Edinburgh called ‘Counting Community Profit!: Defining and Measuring Community Benefits of Local Development and Business Enterprises’.  The conference attracted a number of important speakers – George McRobie (new economics foundation and Founder of the Intermediate Technology Development Group), James Robertson (author of ‘Future Wealth’ and ‘Future Work’), Rob Gray (then Professor at University of Dundee and author of ‘The Greening of Accountancy’) – to name just a few.

The conference was over-subscribed and pivotal in many ways as the Institute for Social and Ethical Accountability (ISEA) – now called Accountability – was formed shortly after and the new economics foundation went on to explore ‘social audit’ more and subsequently wrote the ‘Social Audit Workbook’ with John Pearce.  Those working in ‘social audit’ as it was known then, used much of what had been discussed in the conference to devise principles for ‘social audit’.

After further consideration following the conference ‘social audit’ adopted the following principles:

Multi-perspective: reflect the views of (all) those involved with or affected by the organisation.

Comprehensive: (ultimately) embrace all aspects of an organisation’s social etc. performance.

Regular: take place regularly (annually) and not on a one-off, occasional basis, and become embedded in the culture and operation of the organisation.

Comparative: offer a means whereby an organisation can compare its own performance over time; relate performance to appropriate external norms; and make comparisons with other organisations doing similar work.

Verification: audited by one or more persons with no vested interest in the organisation.

Disclosure:  findings made available to all stake-holders and published for the wider community.

The over-arching principle of continuously improving social performance.

It is interesting that the principles do not include measurability as it was recognised at the time that many social aims are not measurable in the sense that you use a standard yardstick and give it a numerical or standardised value.  Those pioneers in social accounting accepted that it would be a nonsense to try and measure everything – but where you can, do; and where you cannot, still try to assess the change in qualitative terms.

The above principles were espoused for quite a number of years.  In the mid-2000s connections were made with those keen on advocating Social Return on Investment and following a joint meeting in 2008 the fledgling SROI Network and the more established Social Audit Network (SAN) agreed to share a number of the same principles.  There was not complete agreement as SAN felt it was not possible to financialise all outcomes.  However, in the interests of collaboration a joint document (updated in 2010) was written and made publicly available.

Shortly after this meeting both organisations changed them slightly and adopted slightly differing principles to satisfy their differing audiences – the current Principles of Social Value have been published by Social Value UK (previously the SROI Network and the Social Impact Analysists Association). And for reference check out the eight SAN principles.

So what does mean for us now?

Certainly principles around social impact are important especially with the expanding interest in enterprises with a central community or social benefit.  Both approaches – Social Accounting and Audit; and Social Return on Investment – use their respective set of principles to assess the veracity of social reports using one or other of the approaches.  My problem with both sets is that ‘process’ has got in the way of ‘principles’.  That is some of the ‘principles’ are really about the process itself.

I would like to suggest that with the benefit of hindsight – which is where this blog started – we should have a rethink about the principles of social impact.  Concurrent with the evolution of these principles we should also look at the key aspects of all organisations to see if they are socially responsible.  Those key aspects being how an organisation treats its staff and volunteers; how is it governed; how it uses surplus; its financial sustainability; its impact on the environment; and how it affects the local economy.

By building on what has happened in this field of social impact in the past, we should be able to develop tools, approaches and key principles for the future.

The ‘stories about the past’ provide the bedrock for understanding the present, and the development of the future.  Is this what progress is?

Finally – and I hesitate – I would like to suggest a tweaked set of principles for social value…

Clarifying the true change and purpose that an organisation is working towards Focus
Tracking changes so that comparisons can be made over time and between organisations Improvement
Embedding the social impact process and making it central to what the organisation does Regular
Considering more than one view in assessing social value created by an organisation Multi-perspective
Demonstrating that data and information used is important and significant Materiality
Checking that the interpretation of the change that happens is as true as possible Verification
Involving stakeholders in assessing change that happens Engagement
Being open and disclosing what an organisation has achieved or not Transparent

Bingo!

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

Should we put a financial figure on all the impacts made by a social enterprise?

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