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Social value: what is it and why?

Ben Carpenter, chief executive of Social Value UK, argues that, before we start measuring social value, we should ask clearly: what is it, and why does it matter?

Social value is so much more than a value-for-money exercise. If you see social value as simply a new catchphrase for ‘efficiency savings’ or ‘proving how effective’ your activities are, then you are missing the point.

Social value is about individual wellbeing; we all experience changes in our lives, and these changes in some way contribute to our overall wellbeing.

Accounting for social value is about being open to and capturing all of the changes that your stakeholders, customers or beneficiaries experience (including intended and unintended positive changes, but also any negative ones) as a result of your activities. Accounting for social value also means understanding how valuable or important each of these changes are to the quality of life of your stakeholders.

Understanding all of these changes sounds messy and complicated, so why should we do it?

Apart from the impending strengthening of the Social Value Act, those who are serious about social value can point to two drivers:

• An increased consciousness that, as organisations, we must act responsibly and be accountable for our activities. We live in an age where it is no longer acceptable to treat the environment as a dumping ground or treat people unfairly. Read the open letter from Larry Fink, CEO of BlackRock;
• There is a strong, hard-nosed business case for acting responsibly. Organisations that collect data and make themselves accountable to all consequences of their activities for people and the planet are being rewarded. These organisations are better equipped to improve their activities. This leads to better performance and ultimately financial profit as well.

But if it’s messy and complicated, how should we account for social value?

It’s certainly true that there are a lot of tools and products being presented as a solution. The marketplace for social value silver bullets is crowded, and so I offer these two tips:

• Social value is about understanding the value that people place on the changes in their lives. To do this requires some empowerment – giving people who don’t normally have a voice the chance to inform what changes are measured and express their relative importance of the outcomes. Any tool that short-cuts this process carries a risk that you are measuring the wrong changes and applying the wrong values;
• Look to the international Principles of Social Value. Does the tool or method you are using incorporate these internationally accepted principles for accounting for social value? Social Value UK offer assurance and accreditation services for software products, training courses, individuals and reports.

The last tip is a bit of a shameless plug – although not entirely shameless because I believe strongly in these principles.

And it’s not just me, these principles for social value accounting have been adopted by Social Value International (SVI) members in 46 different countries. There are networks in 21 different countries who have built their thinking around these principles.

This thinking is being convened by Social Value UK (on behalf of SVI) and we are collaboratively developing guidance, training and assurance to change the way the world is accounting for value.

The concept of ‘how to measure’ social value is recognisably a work in progress. We will get there through practice and sharing what works (and that’s what we do at Social Value UK).

But my big plea is to encourage people not to jump immediately to the question of ‘how can we measure it?’ Instead, start with: what is social value? And: why is it important to your organisation?

I hope that the answer to this last question is like ours, because we want to see a world where the decisions organisations take are considering the implications on the wellbeing of people alongside financial costs.

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