What approaches to measuring social value are available?
There are a plethora of approaches to measuring return on social value investment available and some organisations, like social enterprises use different ones depending on circumstances. It is beyond the scope of this brief guide of to provide detailed explanations or indeed to provide other alternatives, but we have given an overview of each approach and links to the originating web sites should you require further information. The one you select will depend on a variety of things, including time available, resources, availability of data, access to stakeholders, nature of your social value, when you need the report by and so on. One important point to note is that regardless of which approach you to decide upon, most are designed for larger organisations and may either be unsuitable or need to be adapted for SME’s.
If you would like advice on which one to use and support with the process then simply, get in touch!
The most prominent tool for wellbeing valuation in public sector procurement has been developed by HACT (Housing Associations’ Charitable Trust) in partnership with the research consultancy Simetrica. HACT website is a particularly useful resource for those wishing to learn more about wellbeing valuation.
“Wellbeing valuation allows you to measure the success of a social intervention by how much it increases people’s wellbeing. To do this, the results of large national surveys are analysed to isolate the effect of a particular factor on a person’s wellbeing. Analysis then reveals the equivalent amount of money needed to increase someone’s wellbeing by the same amount.”
They go on to say:
“Wellbeing valuation does not seek to value each individual’s experience of your intervention (e.g. employment training, keep fit) but instead represents the experience of the average person.”
The most obvious limitations are that the calculator is specifically designed for social housing providers and so if the calculator does not contain a value for your intervention then you will have a gap in your report or need to obtain data from elsewhere. As social value impact measurement is flexible you could use some elements of the HACT dataset and combine them with data from elsewhere or alternatively undertake your own research. Great care would need to be taken when using a “mixed methods” approach as taking data from multiple unconnected sources has all kinds of data contamination issues. You would need to justify the rationale, source of data and data application in your social value impact valuation report for it to be acceptable.
Social Return on Investment (SROI)
Social return on investment or SROI uses financial proxies to value outcomes that are drawn from different places or through different methodologies. Our partners at Social Value UK do provide training and if you are going to regularly use SROI their website is a great starting point.
Arguably, using an SROI approach could provide a more accurate or appropriate measurement for specific projects, or a series of projects especially if there are not existing datasets to turn to. As the HACT tool uses reported values for the average person, SROI could give different results and be more specific to your intervention This is not guaranteed, however, and care must be taken when selecting data, during data analysis and when reporting. Any data manipulation, weighting or transposing must be clearly justified and where possible results triangulated. The fact that SROI has been chosen will probably mean that triangulation is very difficult if not impossible.
Expertise is perhaps the biggest limitation. Whereas the HACT calculator has already created the values for you (within the limitations described above) SROI can require more time and effort as well as making more judgements about values and appropriate data sources. However, it should not be discounted on those grounds. Unlike some other approaches, it can be applied to any organisation, has built-in flexibility, is specific, not general, but most importantly it involves the stakeholders and recipients of the social value.
The National Themes, Outcomes and Measures (TOMs) Framework
The Framework has been designed around 5 principle issues, 18 outcomes and 35 measures and are updated annually (including proxy values) and the broad governance structure includes; The National Social Value Taskforce, The Research Advisory Board, and The Social Value Portal.
Whilst the framework has identified the most common social value measures that apply to the whole of the UK it openly recognises that it
“is designed primarily to reflects the needs of local authorities”.
The overall aim of the framework is to provide a national minimum social value reporting standard. Unlike the HACT framework, it can be applied to any project and so allows organisations to compare their own performance to others and benchmark their performance. As with HACT and SROI, the Framework uses a set of proxy values many of which have their source in the Unit Cost Database. The TOM’s guidance document, available here, states that where no UCD value exists government guidance has informed the development of the proxy and that deadweight is included where relevant.
The advantage of the TOM’s framework is that as it is a minimum social value reporting set it has some flexibility built-in. Outcomes can be rephrased, and measures moved from one Outcome to another, the framework also allows additional measures to be added. However, the Framework is designed primarily for local authorities and that can clearly be seen in the list of measures which exclude a good many things which would be classed as social value.
This is predominantly a welfare economics tool, that some argue is too simplistic to use, for deciding if a social value project should proceed. (It can be used retrospectively too). Traditionally, it focusses on economic benefits and so does draw some criticism that this focus is too much on financial return on investment and that social value is often given less consideration and weighting, even if this is not the intention. Therefore, an adjustment has to be made to account for social and environmental impact which in turn leads to a more SROI approach (see above).