Accounting for Social Value
There are a number of ways of reporting Social Value both financial as well non-financial such as Social Return on Investment SROI), S/E Ratio and using narrative case studies. However, most reporting methodologies have been developed before The Social Value Act came into force and therefore fail to take into account the specific requirements of The Act. In some cases such as SROI the work required is extensive and as a result may be expensive.
In order to facilitate the reporting process and ensure consistency of reporting we have developed a streamlined methodology called Accounting for Social Value which allows you to develop a 3D Profit and Loss Account specifically aimed at meeting requirements of The Act and Public Sector procurement requirements. The Profit and Loss Account covers financial, social and environmental impacts – this is why it is called a 3D Profit and Loss Account!
The Accounting for Social Value Methodology follows a simple 7 step procedure and has been developed to help business to identify both their non-financial and financial social value
- We use a proven methodology for business mapping
- Reporting includes both financial and non-financial information
- We use financial proxies to identify financial benefits where possible
- 3D Profit and Loss Social Account to allow simple and comparable reporting
Of course there are many ways to measure and report Social Value. Key reasons for adopting this approach for measurement and evaluation are as follows
- It is simple and easy to follow
- It is cost effective
- It allows Public Authorities to compare competing submissions (i.e. apples with apples)
- It is outcome focussed and may be used to improve performance
- It is scalable
- It ensures that Business meets specific Public Authority needs
- It permits innovation and promotes the formation of Social Partnerships
In the notes below, we have laid out reporting methodology in more detail. We have also developed a detailed ‘Worked Example’ that describes how a social enterprise called CleanCo measures its social value for a cleaning contract with a local council. See here
In addition we have developed a number of worksheets that you may access through the portal although you will need to register first. A description about available Work Sheets may be found here
We also offer a bespoke consulting service network and would be happy to work with you to help you measure your social value and complete your Social Value Account. See ‘Consulting Services’ or contact us directly email@example.com
Ultimately and by following our Methodology you will be able to report your Social Value in a 3D Profit and Loss Account.
The aim is to identify in both financial and non-financial terms where a Business, Social enterprise or 3rd sector provider is meeting both Local and National needs.
- You will need to access The Community 360 Hub (A Geospatial Map) in order to download your target public sector objectives and their social value strategy (link)
- Where information is available we provide information in Excel format that you may down load
- We are working through all public sector bodies to identify and upload the information as quickly as possible. If your target organisation information is not available, please contact us directly and we will send it to you directly.
In order identify the benefits that you bring to your target public sector body you will need to map your Outcomes and Impacts for both your core business and any community projects for the areas where you work.
Key issues to consider:-
- Measuring what matters is fundamental in capturing your social contribution to society.
- The Social Impact Value Chain is central to impact analysis and will allow you to monitor, manage and improve delivery of social value
- Core inputs, activities, outputs, outcomes and impacts should be identified measured, monetised and valued across your services.
Non Philanthropy Capital – http://www.thinknpc.org/
Mapping Outcomes for Social Investment – http://www.thinknpc.org/publications/mapping-outcomes-for-social-investment/
Big Society Capital – Outcomes Matrix – http://www.bigsocietycapital.com/outcomes-matrix
In order to identify the areas where you presently add net value and areas where you could target for potential future value creation you will need to download our worksheet and map your outcomes against public sector targets and measures.
For instance your core business may involve employing young offenders in which case you will need fill in the number of young people being employed against the relevant public sector target and measures. Alternatively, your community CSR programme may involve reduction in household waste to landfill in which case you identify the tonnage saved.
As a part of your planning you should also identify both where you presently meet public sector targets as well as where you could have the potential to meet additional targets and KPIs. You may then decide to commit to these additional targets as a part of your tender submission.
For example, your core business may be managing waste services for a local authority, but if you make one of your recycling bag collection points a public library, then you could also (indirectly) contribute to increasing the use of libraries.
Remember that you will need to provide evidence that you have delivered (in the past) or intend to deliver these benefits. If you are preparing a bid, this may be in the form of a bid clause allowing the public sector body to cross reference your commitment.
You will need to sum the non-financial benefits from both your core business activities and community projects. Where the benefits accruing do not comprise a ‘number’, but rather a narrative, then insert an appropriate description.
There are a number of databases available to you to help place a financial value on your Outcomes or Impacts. Whilst these are not absolute they may be used to assess value in comparative terms.
In some cases the relevant data will not be available and you will need to insert ‘proxies’. It is important that these financial proxies can be substantiated and are robust.
You can read more about financial proxies and learn more about useful social value databases here
Complete 3-D Profit and Loss Account showing both financial and non-financial measures
This is the final step of the analysis. You will need to transfer your financial and non-financial data into your 3D Profit and Loss Account. See example laid out below.
Note that your submission will need to be supported by the relevant evidence and references with respect to the financial proxies used
It is sensible, though not compulsory to get an independent verification of your submission.
We provide 2 levels of assurance
- Limited – we will check spread sheets and ensure that you have filled in the spreadsheets correctly. We will do a random sample check your data sources.
- Reasonable – As per Limited Assurance but we will carry out a detailed check of your data sources and ensure that evidence is in place to substantiate your claims if challenged.
For those organisations that need this service please contact us on firstname.lastname@example.org