Social value is the contribution you make to society and in particular to your local society and community (where you operate). There are various more complicated and detailed definitions around; for example, Social Value UK (and Social Value International) defines it as:
“..the quantification of the relative importance that people place on the changes they experience in their lives. Some, but not all of this value is captured in market prices. It is important to consider and measure this social value from the perspective of those affected by an organisation’s work”.
Every organisation makes an impact. Some impacts are negative, for example, pollution or poor working conditions. Some social value impacts are positive, including providing employment, developing a supply chain and training the next generation of apprentices. Some impacts are planned and some are unplanned. Many of the most positive organisations were doing it long before the concept of ‘social value’ came along – they are simply “doing the right thing”.
Some organisations have more interest in social value than others. Government receives money from citizens in the form of taxes (corporation tax, employment tax, sales tax, income tax, property tax – it all comes from you and me); and “society” (citizens, or you and me) want to know that the money is being spent on impacts that we consider positive.
Many other organisations in the public sector that are funded by the government, such as local authorities, Housing Associations, NHS and Arm’s-length bodies and any organisation which uses European Procurement rules are subject to the Public Services (Social Value) Act 2012. This requires public authorities to take into consideration the social value contribution of their suppliers during the procurement process.
These organisations represent around 40% of all contract spend in the UK, and potentially a higher proportion of b2b (business-to-business) spend [see also “Treasury Green Book“]. The invitations to tender issued by these organisations request that businesses demonstrate social value contribution and will monitor it during contract delivery. This usually includes the supply chain, so even if you don’t tender for government or public services contracts but your customers do, you may be affected.
Different forms of social value
Social value isn’t just about giving money to charity. In fact, many forms of corporate charitable giving don’t contribute any more to the charity than the £ amount you gave them – whereas, with the right strategy, you can add so much more by leveraging your knowledge, experience and organisational resources, to produce a wider benefit.
If the reason that you are reading this page is to answer that section of the invitation to tender, then you need to understand a bit more about it.
Social value is about actively adding benefit to the community around you and is about measuring the impact on the well-being of your economic, social and environmental activities. To explain this further:
- Everyone employs people, but are you an attractive place to work? Do people come to work with you by choice? What staff activities do you do? What training do you give? Only what is needed for your business, or do you encourage staff to pursue their own interests?
- What community projects do you do? Do you have a favourite charity that you support? Do you offer staff time or specialist skills, with the use of your facilities, with projects, or do you give money? Some organisations offer mentorship for local micro-businesses – it encourages staff, too.
- The environment is another area where many organisations add social value. Perhaps you go above and beyond the requirements of the law and environmental protection, to make the space around your place of work pleasant for everyone who uses it. If it’s a fast-food outlet, you may tidy up dropped litter from the whole street and not just outside your premises. You may think of this as a necessary part of doing business (since it may be your customers doing the littering, and the litter has your brand name on it), but that needn’t necessarily stop you reporting it as a social value contribution.
- How do you spend your money? Do you buy the cheapest, no matter how many transport miles (and carbon) that costs, and no matter whether the source uses toxic chemicals and slave labour? Do you buy local, look beyond the price, and set standards for the way the goods or services are produced as well as the quality of the goods?
- How do you treat your suppliers? Do you pay early, or at the last possible date to avoid a penalty? Do you ask your suppliers to help you with innovation, or do you give them a strict specification and require it’s met?
Do you know how much this contributes to your community? To your bottom line? Perhaps most importantly – why do you do it this way?
Social value outcomes add value both to your business and to your community. But sometimes they only work if you planned them. That’s why it’s important to think about the collective benefit.