As HACT's Chief Executive Matt Leach prepares to speak at this year's SROI Network Annual Conference in Milan in June, he reflects on how HACT's new Social Value Bank and partnering guide compares to other social value tools available to the market.
This blog was originally written for the SROI network.
Less than a year ago, I was delighted to be invited to attend the SROI Network’s annual conference in Liverpool, where I made a tentative presentation around ideas HACT were developing in partnership with SROI Network advisor Daniel Fujiwara on new approaches to measuring social value, drawing on Daniel’s Wellbeing Valuation methodology, which has been generating increasing interest in both the UK and a range of OECD member states.
I’m now massively looking forward to this summer’s Social Value Matters, bravely scheduled to take place in Milan, in the two days leading up to England taking on Italy in their opening tie in the 2014 World Cup. It is an event which looks set to highlight the extent to which the SROI Network has succeeded in mainstreaming social value thinking, across public, private and civil society sectors and internationally. In the session I’ll be running with Daniel (now heading the ground-breaking social value consultancy, SImetrica), I’ll hoping to be able to share progress, and benefit from the input of an even wider group of social value thinkers and practitioners as we move from concept towards what we think will be an important and viable new approach to understanding and maximising organisational social value.
Social Value Matters is coming at an important time for HACT and for the wider social value community. As concepts of social impact and return grow in visibility and are more broadly embedded in decision-making at all levels, some of the questions I raised in Liverpool have become more important. In particular, the extent to which conventional SROI approaches are capable of providing support for decision making in larger organisations who may be investing resources across multiple areas of social value, and require strategic-level (as opposed to evaluative) tools to help them with that process
The challenge we have been seeking to address is whether it is possible to develop cost-appropriate approaches to social value measurement and decision making which are capable of helping complex organisations understand and compare the potential value of disparate community focused initiatives using comparable measures and metrics. And to do so in a way that retains the core principles established by the SROI Network and are consistent with and complementary to conventional SROI approaches.
This is particularly important in our core sector of housing. In the UK a housing association (not-for-profit landlords, providing 1 in 8 homes in England and Wales) might typically invest several hundred thousand pounds a year in support of activities ranging from community gardening to youth sports to employability initiatives – and want to be able to show to its residents, governing board and regulator that their investment decisions are underpinned by an understanding of the value they are creating.
In developing our approach, we’ve looked to focus on three key elements:
- A single and coherent methodological approach to the generation of social value proxies
- A light-weight, but insight rich framework for modelling and comparing intended impacts
- The ability to accommodate and sit alongside more in depth SROI investigations where that is appropriate.
- A single and coherent methodological approach to valuation:
One of the biggest successes of the SROI Network has been the building of what was WikiVOIS and is now the Global Value Exchange. Access to high quality social value proxies is a critical component of any SROI evaluation, and the Exchange has enabled social value practitioners to quickly find and apply more and more robust values than at any time in the past. It’s a great resource that continues to grow in scale and importance.
But the size and scale of the Exchange is also a weakness when it comes to assessing comparative social returns across multiple areas of social activity. The sheer range of values on the Exchange, generated by different academics and researchers using different methodologies at different times to assess both impacts and then to monetise them make it hard to assess comparative impacts across differing areas of activity where values are derived from very different methodological bases.
That is why we have prioritised work with Daniel Fujiwara to create a single, methodologically consistent set of social value metrics covering the widest range of community investment activities, drawing on his Wellbeing Valuation approach, which involves the econometric analysis of very large national datasets, and produces social impact values at a level of robustness which has seen it recognised and used by the UK government in assessing social value of a range of its own activities (most recently around sports and cultural activities).
Whilst the sheer breadth of the value set means that it cannot always go into the same level of detail as some more thematically-focused valuation research, the fact that all the generated values come from the same methodological base means that valuation reports that use them will inherently be comparable one to another. We’ve made the new value set available (subject to some limited licensing conditions) on the Global Value Exchange, as well as from the HACT/SImetrica Social Value Bank, on which we’ll be publishing future Wellbeing-based values as they are produced.
A light-weight, but insight rich framework for modelling and comparing intended impact
Conventional SROI approaches provide great in-depth insight into the social value created by relatively focused interventions, but they are less effective as a means of modelling and comparing the prospective social value created across a portfolio of social investments. This isn’t just a matter of comparability of metrics – it is also an issue of cost and timing. It may not be cost-appropriate to commission full SROI reports on all areas of activity, and in any event it may not be possible where activities may be at a planning rather than implementation stage. This can make it challenging to achieve any sort of robust assessment of the comparative social returns of a portfolio of activities needed in order to assure a business it is planning to achieve the optimal social value from its investments.
That is why, after extensive practical testing with partners, we’ve released a lightweight, but powerful Social Value Calculator model that utilises our new metrics set, enabling easy assessment of the potential value generated by social investment activities and portfolios, and the ability to model potential outputs in “sandbox” fashion. And later this year, we’ll be releasing (initially for housing providers and, later, more widely) Value Insight – a next generation online social and economic impact mapping and modelling product that will take modelling, reporting and social value analysis to the next level.
It is important to recognise what our new approach does not do. With a value set based on analysis of responses by individuals to extensive panel interviews across massive samples over many years, it does not place the same emphasis on project-specific stakeholder engagement that sits at the heart of an assured SROI report. And the scope of the analysis, key outcome measures, and ‘story of change’ are necessarily set by delivery agencies, rather than project beneficiaries (although there is provision in our model for limited stakeholder outcome survey work).
We’ve also sought to reduce the extent to which calculations of value are subject to sometimes arbitrary adjustment factors, which can have a significant impact on social return calculations whilst being difficult to robustly substantiate, in particular in relation to attribution, deadweight and drop off. Instead, we have opted for a much more measured use of terminology when talking about the contribution of any individual project to the wellbeing to beneficiary groups.
In doing so, we have sought to reduce some of the areas of SROI practice which in our view carry with them the highest levels of cost when compared to quality of insight they generate, whilst significantly improving the extent to which robust and cost-effective impact comparisons can be made across businesses.
The ability to accommodate and sit alongside more in depth SROI investigations where that is appropriate
Whilst there are clearly some key differences of approach between the HACT/SImetrica model and conventional SROI, it is critically important to us that all of this sits within the context of existing social value and social return practice. The Social Value Bank will be fully accessible to those seeking to use its value for more conventional social return analysis, and the values generated by our Social Value Calculator, are intended to be compatible with and comparable to those generated by SROI evaluations (whilst recognising that these will typically go into more depth than the assessment provided by the calculator model). This provides scope for those organisations who might only be able to afford a conventional SROI on one part of their social investment portfolio to nevertheless access a cost-appropriate and robust assessment of the overall social value they create, helping with both business decision making and project/impact evaluation.
The demand for this sort of model is already evident. Since we launched Measuring the Social Impact of Community Investment: A Guide to using the Wellbeing Valuation Approach and its associated Social Value Bank in March, over 700 organisations have accessed guidance and values, with interest extending well beyond HACT’s core housing market. This makes it (for the time being) the fastest growing new social value product launched in recent years.
We’re hugely excited by the impact of our new social value framework, and its potential as a tool for mainstreaming social value at a strategic level in organisations making choices and delivering impact across a range of differing social priorities. HACT has already secured funding to support the development of further social values compatible with our new approach, working in partnership with Daniel Fujiwara and SImetrica, increasing its relevance and viability as a tool, and will be publishing v2 of our model and values later in 2014-15.
It is early days yet, and we’re still learning, developing and putting things right: we think the model and values are great, but at the moment, it’s still a work in progress rather than a final product. We’re hoping that – as our Social Value Bank grows, and our methodology and model develops - we’ll benefit from developing practice and learning across the SROI field, and contribute to continued significant growth in the social value marketplace. Its why I am very much looking forward to sharing where we’ve got to and benefiting from the great range of speakers and delegates who are going to be in Milan in six week’s time.
For more information on HACT’s approach to modelling and measuring social value, contact Head of Social Impact, Lizzie Trotter.
To find out more about Social Value Matters, The SROI Network's annual conferece, head to the event website here.