4 March, 2014

Measuring the Social Impact of Community Investment: A guide to using the wellbeing approach

The social housing sector has long been committed to investing in initiatives to strengthen communities and to aid individuals, through a belief in the positive social impact created by these activities. One outcome of the current economic climate is a growing recognition of the significant contribution of this social value creation in the assessment of value for money. However, until now, there has been little genuine evidence of the value generated by these activities, in a form that Housing Associations can use to enable them to balance competing demands for investment. The sector has well-developed indicators for comparing financial and operational performance but nothing exists on a similar level to compare social impact. Evaluation approaches such as Social Return on Investment are being used more widely, but can be subjective, resource intensive, and until now have lacked a set of comparable and objective proxies to calculate social impact.

Now, for the first time, organisations will be able to make quick and informed decisions about social investment, rather than basing decisions on what simply ‘feels right’.

This handbook is derived from research that is conceptually innovative yet sufficiently rigorous for HM Treasury to include it as a new evaluation approach in the Green Book, the Government’s project appraisal guidelines. Affinity Sutton and Catalyst were encouraged by the research published by HACT and London School of Economics’ Daniel Fujiwara in early 2013, and formed a partnership to support the evolution of this work into an additional, practical method to assess the social impact of community investment initiatives. A key objective of this partnership was to translate the theory into practice.

As part of this we invited a small group of leading housing organisations to join us in testing the practical implementation of the approach. Through their involvement we have been able to ensure the methodology is relevant and accessible to a range of practitioners. It can be applied in a straightforward and standardised way, no matter the size or complexity of the organisation. As a group, we have found this work to have a variety of practical uses: from quantifying the social difference made as an organisation, through enabling rapid appraisals that compare the social impact of different projects, to providing a more holistic view of future investment options.

The model provides us with the first step towards developing a common language for measuring our social impact.

We feel it has reached the point where it can and should be freely shared, both within housing and other relevant sectors, and we encourage other organisations to share their experience of using this guide. We recognise that our community investment activities are inevitably shaped by a complex set of factors but very much hope this new approach gives us a valuable additional tool to demonstrate the significant difference we make.

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Measuring the Social Impact of Community Investment: A guide to using the wellbeing approach

PUBLISHED: March 2014

AUTHORS: Lizzie Trotter, Jim Vine, Matt Leach and Daniel Fujiwara

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