Creating and Assessing Value
Summary[edit | edit source]
This module interrogates the concept of value in the context of the social economy and seeks to broaden it from its economic dimension. In doing so, it explores the different ways in which value can be defined, for example in social, environmental or economic terms. It also puts forward a multiple stakeholders’ perspective and suggests that there are different , possibly conflicting, conceptualisations of values (value for whom?). Finally, it reviews various methods and models for assessing value in the social economy.
Editorial[edit | edit source]
The Social Economy includes a wide diversity of organisations (e.g. associations, cooperatives, mutuals, foundations, social enterprises) operating across various sectors; and SE organisations are created for a variety of reasons, they can be driven by political, economic, social, environmental or quality of life motivations. But in all cases they are driven by a social mission, broadly understood, which includes a set of principles such as solidarity, the primacy of people over capital, democratic governance, and environmental sustainability. To put it simply, they are created to contribute in some ways to people and the planet’s well-being. This suggests that the ‘value’ they create differs markedly from that of conventional capitalist business. In the Social Economy, value extends beyond economic return, is created for a range of diverse stakeholders beyond shareholders and needs different methods of assessment. So the issue of ‘value’ in the Social Economy raises questions about what constitutes value (e.g. economic, social, environmental), for whom it is created (e.g. local producers, users, the wider community, disadvantaged groups seeking job opportunities or affordable housing and so on), how it can be assessed (e.g. more qualitative or quantitative methods), and why it is assessed (e.g. for fundraising purpose, to account to users, to mobilise internal support). Let’s take each of these questions in turn.
First the Social Economy raises essential questions about the sort of value we want to create, and challenges the way value is conceptualised in orthodox economics. In this respect, it is clearly inscribed within a movement of heterodox economists who, with titles such as The Spirit Level (Wilkinson & Pickett, 2010), Mismeasuring our Lives (Stiglitz et al, 2010) or Prosperity without Growth (Jackson, 2009), have questioned the pursuit of growth and profit as the sole value or objective of economic activity. As these authors invite us to do, the Social Economy puts under scrutiny the narrow focus on financial returns and asks the fundamental question of what it is all for. Whilst orthodox economics and capitalist enterprises focus on growth, productivity and ultimately profit maximization, Social Economy organisations have broader missions that encompass economic, social and environmental objectives. The value they create can be ‘economic’ (e.g. decent job and income opportunities, local economic development), but also social (e.g. promoting health, education, social justice, equality, democracy at work and in community) and environmental (e.g. fighting climate change by promoting renewable energy, or sustainable agriculture; restoring biodiversity). So the value created by the Social Economy, whilst diverse, can be understood in terms of ‘common good’. For example, the ‘Economy for Common Good’ network has put forward 4 values that underpin an economy that works for the common good: social justice, human dignity, environmental sustainability, and transparency and co-determination (https://www.ecogood.org). By questioning the value of the economy, the Social Economy demonstrates that we can ‘take it back’ for our well-being and that of the planet, and that it is not some independent, autonomous sphere driven by some inevitable laws (e.g. of the market, of profit maximisation) over which we have no control (Gibson et al, 2013). By making the economy work for a diverse range of social and environmental values, the Social Economy also opens itself up to potential tensions and contradictions. For example, a food cooperative set up by consumers to provide affordable healthy food to members but using tayloristic management systems to reduce staff costs would set in tensions members’ health with workers’ participation and well-being. Or a coal mine being taken over and managed by its workers might preserve jobs in the community, but at the expense of the environment and climate. But by raising these tensions, the Social Economy opens up a space for debating what we value most, who we want to privilege. So rather than leaving these tensions unaddressed or to ‘experts’, it brings them to the fore and offers an opportunity for an inclusive and democratic debate.
To turn to the second point, in raising questions about value, the Social Economy also asks who is the economy for and again challenges the narrow focus on shareholders to offer a more inclusive vision of who should benefit. In the Social Economy, the focus on shareholders is replaced by a more inclusive notion of stakeholders, i.e. all those affected in one way or another by the activities of the organisation. This could include customers or users, that is those directly benefiting from the product or service of the organisation; it also includes employees or maybe those working on a voluntary basis (e.g. have they got decent working conditions, opportunity for using or developing skills, for participating in the decision-making process), the local community (e.g. how does the organisation impact on their living conditions, quality of life, health), and the broader social and natural environment (e.g. education, social infrastructure, rivers, air). Identifying the main stakeholders, or stakeholder analysis, is thus a central task of any Social Economy organisation in order to understand how to deliver value to each of them, or at least minimise negative impact. But as with the range of values that the Social Economy may pursue, there can be conflicts between different stakeholders. As per the examples used before, a consumers cooperative set up to provide affordable products to members might engage in a range of cost-cutting initiatives to achieve set objectives that could be in conflict with suppliers and/or employees interests. A coal mine being taken over and managed by its workers might preserve jobs in the community, but at the expense of the environment and the wellbeing of the wider local communities.
Because Social Economy’s prime purpose is to deliver a social mission, they have to prove their benefits, or be accountable, to society rather than merely to shareholders; this means that stakeholders should be involved not only as beneficiaries of the organisation but also in assessing its value; they should be at the centre of the assessment process, a process we now turn to.
If the Social Economy creates a different sort of ‘value’ than the conventional economy, it also means that it needs to be captured, or assessed differently. Indeed, the tools used to measure value in conventional business (e.g. market share, growth rate, profit and loss account) would not be appropriate to assess the value, or impact, created by Social Economy organisations. Social impact assessment, a term often used to refer to the social change that can be attributed to an organisation’s activity, is a field that has attracted increasing interest, and can follow many different methods, from very basic to quite complex. It can be simple counting (e.g. counting the number of people who have been through a training programme, counting the number of people from a disadvantaged background who have got jobs, counting the number of organic meals delivered in schools), to collecting users’ feedback (e.g. conducting interviews or distributing questionnaires to beneficiaries), to attributing a monetary value to the impact created. Whilst there is a growing emphasis on the quantification of social impact (through for example Social Return on Investment, SROI), there is also a consensus that a mixed method approach combining quantitative and qualitative methods is best to capture social value. Firstly there is an issue of resource, doing a SROI for example requires time, skills and resources that a small Social Economy organisation might not be possess. Secondly, and maybe more fundamentally, it would be difficult to translate something as broad and subjective as health, justice, biodiversity or well-being for example, into numbers or financial value. Whilst quantitative or financial measurement might be useful in some contexts for some purpose (e.g. to demonstrate the worth of the organisational activity to fundraisers), there is a danger of reducing social value to financial value and of losing sight of the big picture, or the real value the organisation is meant to create.
And this takes us to our final question when considering value assessment in the social economy: why do it? As hinted above, the methods of assessment chosen will depend on the purpose of the assessment: what and whose decisions does it aim to influence? Who is it aim for? Is it designed to prove or account for the organisational impact to internal or external stakeholders? Is it meant to improve internal operations by identifying what works well or not so well? Or is it designed to involve users in a process of service or product improvement? If the impact assessment is performed to attract fundraisers, then some more formal and quantitative methods might be more appropriate; however, if the main purpose is foster democratic participation of all users, then collecting qualitative feedback from this group would be more suitable.
The four questions outlined above - what, who, how and why - provide a useful framework for making sense of value creation and assessment in the Social Economy. They also serve as a valuable device to organise existing resources on this topic. Of course all these questions are interconnected, as we saw above, the question of who we are creating value for will no doubt affect what constitutes value and how it will be assessed; some of the resources we include here start with the question of HOW or methods, and in doing so, then raise the question of WHO (stakeholders) and WHAT (the dimensions of value); others start with the question of the nature of value (WHAT) which then leads them to consider who the main stakeholders are. But these 4 questions serve as useful heuristic device to categorise the resources in this section in terms of their main focus or angle. In addition, we have also included a separate category for Social Impact Investment as this is an area of growing relevance and interest, and one that touches on the four questions outlined above within the particular context of finance and investment.
In summary, the sources in the table below are categorised according to type (academic paper, handbook, practical guide or workbook, project report, case study, podcast or video), and main focus (What, Who, How, Why, Social Impact Investment), acknowledging that there is close interconnection between these questions.
Gibson-Graham, J.K., Cameron, J, and Healy, S. (2013) Take Back the Economy: An Ethical Guide to Transforming Our Communities. Minneapolis: University of Minnesota Press.Jackson , T. ( 2009 ) Prosperity Without Growth: Economics for a Finite Planet . London: Earthscan.
Stiglitz , J. , Sen , A. and Fitoussi , J. P. ( 2010) Mismeasuring our lives: Why the GDP doesn’t add up . NewYork : The New Press.
Wilkinson , R. and Pickett , K. ( 2010 ) The Spirit Level . London : Bloomsberry Press.Index of Resources[edit | edit source]
| Title | Type | Description | Language |
|---|---|---|---|
| Social Return on Investment: Valuing what Matters, NEF | Practical Guide | This guide produced by the New Economic Foundation (NEF) aims firstly to develop understanding of SROI, and secondly to provide a practical step by step approach to train practitioners to prepare a SROI analysis. Each step is illustrated with two case studies. | English |
| A Guide to Social Return on Investment, 2012, the SROI Network | Practical Guide | Very much like the NEF guide above, this guide explains what SROI is, describes its various steps and illustrates them with a working example: Wheels to Meals. | English |
| Review of impact assessment methodologies for ethical finance, 2014, FEBEA | Report | An overview of social impact assessment, with special focus to ethical banks. The report aims to (a) clarify the terms and underlying concepts currently used to define social ethical banks, (b) provide a critical review of the methods for measuring social impact in the field of ethical banks, and (c) identify the impact of ethical banks' activities. | English |
| Economy for the Common Good (ECG) Workbook | Workbook | Description of ECG methodology for assessing value. The workbook produced by the Economy for Common God network includes a description of the various values and stakeholders that are included in the Common Good Matrix, and details of the indicators and assessment methodology | English |
| 10 real-life prototypes for a Common Good Economy, 2021, ECG | Case studies | Description of how ECG and its methodology can be used to repurpose economic activity towards the ‘common good’ across 10 different types of organisations, from a for-profit manufacturing company, to a bank, a municipality, a region, a university… | English |
| Social Impact Measurement for Civil Society Organisations, SIM4CSCOs | Report | Report produced in 2020 by an Erasmus + project; it documents best practices, needs and challenges in relation to social impact measurement in several European countries | English |
| D.6.1. Socio-Economic Evaluation, 2016, DIY LAB | Project Report | Report documenting the socio-economic evaluation carried out to assess the impact of the introduction of a DIY Lab into schools and universities. The project used Collaborative Action Research to design and assess DIY Labs in schools and universities in 3 European countries. Each partner produced a list of ‘impacts’ and related evidence to assess the DIY Lab. | English |
| Chapter 1: Ways of knowing (epistemology) and values. In ‘Enhancing Studies and Practices of Social and Solidarity Economy- A Handbook', 2015, York St John-Erasmus Social and Solidarity Economy Consortium | Handbook including a mix of educational material: literature review, 3 short case studies, 2 pedagogical activities | Provides an overview of the way knowing and valuing depends on different stakeholders; compares values in the solidarity and commercial sectors, and illustrates the discussion with case studies and reflective exercises. | English |
| The story of solutions, 2013, The story of stuff project | Video | This 9 minute video suggests we shift the goal of the economy from ‘more’ to ‘better’ and illustrates the values that could make up ‘better’, from health, to community, equality or democracy for example. | English |
| The impact of the social economy (2015) | Video | Under 3 minute video that illustrates the various ‘goods’ produced by the social economy, from employment opportunities, to affordable housing and common working spaces (In French with English subtitles) | English |
| Hand, D., Dithrich, H., Sunderji, S. and Nova, N. (2020) Annual Impact Investor Survey, Global Impact Investing Network. | Report | This survey highlights the impressive decade of market evolution. From 24 members responding to the 2010 report; the present 2020 report provides insights from nearly 300 of the world’s leading impact investors. | English |
| Finance4Good Mini-Series (4 Episodes) - Social Economy Talk, Social Economy Europe | Podcast | The 4 episodes of Finance 4 Good are presented by FEBEA. They discuss social impact investment and illustrate it with cases from different countries | English |
| La Torre M., Trotta A., Chiappini H. and Rizzello A. (2019) Business Models for Sustainable Finance: The Case Study of Social Impact Bonds. Sustainability, 11(7):1887. | Academic Article | The study identifies three different models of Social Impact Bonds: (i) SIB as a fully collaborative partnership; (ii) SIB as a low-collaborative partnership; and (iii) SIB as a partially collaborative partnership. | English |
| Impact Investments: Country profile (Italy) | GSG Country reports | The report provides a market overview of the Italian Economy highlighting the country's strong tradition of mutual credit, third-sector Organizations and strong per capita philanthropic contributions. It also provide some key highlights on impact investments and key initiatives and concludes with initiatives for transition to impact economy 2030. | English |
| Bandini, F. and Pallara, F. (2021) Impact Investing: Il quadro italiano. Bologna: Università di Bologna - Dipartimento di Scienze Aziendali -Yunus Social Business Center (YSBC), p. 158. | Academic paper | What is impact investing? How does it work in Italy? | English |
| OECD, UNDP (2021) OECD-UNDP impact standards for financing sustainable development, OECD Publishing, Paris. | Report | Mapping of the existing impact management standards and impact investing standards. | English |
| Social Business model canvas | Software tool | Help think about what is the value proposition of your organisation. It can be used to understand your own organisation or others. | English |
| Kroeger, A. and Weber, C. (2014) Developing a conceptual framework for comparing social value creation. The Academy of Management Review, 39(4): 513-540. | Academic Article | Help developing a conceptual framework to compare the effectiveness of social interventions serving the different needs of different treatment groups in different socioeconomic and institutional contexts | English |
| Matei, A and Dorobantu, A.D. (2015) Social economy – added value for local development and social cohesion. Procedia Economics and Finance, 26: 490-494. | Academic Article | Reflects on the added value of social economy and focuses on three main categories of social economy stakeholders: public authorities, third sector, and businesses. | English |
| Activities on cooperative Values and principles. The Coop College, UK | Activity | Various short interactive group activities inviting students to engage with cooperatives values and principles in playful way. | English |
| Korsgaard, S. And Anderson, A.R. (2011) Enacting entrepreneurship as social value creation. International Small Business Journal, 29(2): 135-151. | Academic Paper | The paper uses the case study of a sustainable housing project to illustrate the multiple dimensions of the social and economic value created by social entrepreuneuriship, from local community development, to personal growth. | English |
| Academic Paper | The paper presents a holistic impact measurement model for SEs, called social impact for local economies (SIMPLEs). The impact model offers a five‐step approach to impact measurement. These steps help SE managers to conceptualise the impact problem; identify and prioritise impacts for measurement; develop appropriate impact measures; report impacts and embed the results in management decision making | English | |
| Mäkelä, H., Gibbon J. and Costa, E. (2017) Social Enterprise, Accountability and Social Accounting. Social and Environmental Accountability Journal, 37: 1-5. | Editorial - Academic papers in Special issue of Social and Environmental Accountability Journal | Current social accounting measures are not adequate and need to support a more ethical approach towards social and ecological matters within business. Social accounting research shows that the current measures for accounting for sustainability build on the basis of the profit-maximising principle and therefore need to be profoundly rethought. | English |
| Grieco, C, Michelini, L., and Lasevoli, G. (2014) Measuring Value Creation in Social Enterprises: A Cluster Analysis of Social Impact Assessment Models. Nonprofit and Voluntary Sector Quarterly, 44(6): 1173-1193. | Academic Paper | Reviews the concept of Social Impact Assessment (SIA) and compares and analyses various models of SIA. | English |
| Social Impact Measurement and Impact Investing for Social Enterprises | PhD Thesis | This research provides a better understanding of the underlying theory for impact measurement to fill the gap in the literature. Certain impact models are presented and compared such as: Outcome Matrix (OM) Impact Reporting and Investment Standards (IRIS) Social Enterprises Balanced Scorecard (SEBS) Social Return on Investment (SROI) Logic Model (LM) and Social Accounting and Audit (SAA). Research evolves around how to improve impact assessment models with Theory of Change and Stakeholder Theory | English |
| Value Creation: Beyond the Dollars Sign. TEDxUTP | Video | This is a 13 minute video of Calvin Woo (social enterpreneur) talking about value and value creation beyond financial outcomes and the power of education to change live and be leveraged for social good. | English |
| OECD (2021) Social impact measurement for the Social and Solidarity Economy: OECD Global Action Promoting Social & Solidarity Economy Ecosystems. OECD Local Economic and Employment Development (LEED) Papers, No. 2021/05, OECD Publishing, Paris. | Paper | After discussing the origins and drivers of social impact measurement, this paper examines existing methodologies developed at the local, national and international level and finally reviews how these are being implemented in the social and solidarity economy. | English |
| About Doughnut Economics. Doughnut Economics Action Lab | Practical Guide | Methodological framework and tool that can help organisations to become regenerative and more distributive by design | English |
| European Commission, Directorate-General for Employment, Social Affairs and Inclusion, Organisation for Economic Co-operation and Development, Policy brief on social impact measurement for social enterprises : policies for social entrepreneurship, OECD Publishing, 2015. | Policy Report | This policy brief on social impact measurement for social enterprises was produced by the OECD and the European Commission. It presents the issues and ongoing debates surrounding social impact measurement and provides concrete examples of measurement methods. It highlights the concept of proportional measurement, in other words balancing up the costs and benefits of the measuring process. The policy brief also looks at guidance and resources for use by social enterprises and how to create a more widespread culture of measurement among stakeholders despite their often limited human and financial resources | English |
| Real Value (2015) | Documentary | Real Value is an award-winning economics documentary produced by Jesse Borkowski that delivers a refreshing meditation on how business can be used to create value beyond profit; connecting motivational stories from social entrepreneurs working in agriculture, apparel, insurance, and biofuel, with the captivating science behind our perception of value from world-renowned professor of psychology and behavioral economics, Dan Ariely. The film serves as inspiration for any business owner, entrepreneur, or customer who is looking to better understand what happens when a business puts people, planet, and profit on equal footing. | English |
| Business Entrepreneurship vs Social Entrepreneurship | Video | This is a 7 minutes video looking at the differences between Business Entrepreneurship and Social Entrepreneurship. It examines the foundamental differences between transactional solutions versus transformational leadership and emotional intelligence. Finally, it reflects on the challenges in measuring the true value, ROI and the financial impact of Social Entrepreneurship. | English |
| Measure your impact with Social Return on Investment (2018) | Video | This is a 3 minutes video explaining the SROI model: Social return on investment (SROI) is a model used to quantify the social and financial benefits and value of a service, programme, policy or organisation to society. | English |
|
Social impact measurement for the Social and Solidarity Economy (2022) |
Video | This is a short, 1 minute long, video by the OECD Global Action “Promoting Social and Solidarity Economy Ecosystems”, explaining the benefits and challenges in measuring SSE impact. | English |
| Osborne S. (2020) Recover and Rebuild: Impact measurement. | Webinar | Sue Osborne (SSE Yorkshire & North East director and measurement consultant) shares how to use evaluation tools and methodologies to support effective decision making and planning, provide insights for marketing and data to funders | English |
| Academic Report | This report is based on in-depth qualitative research with 10 manufacturers in Australia and provides evidence of a productive and responsible culture of manufacturing that goes beyond business as usual. It documents practices that contributes towards the making of an inclusive and environmentally sustainable economy (e.g. through offering decent jobs, including workers as valued stakeholders, or the design of high quality and durable products). Altogether this study suggests that at least some manufacturers are motivated as much by social and environmental justice than by profits. | English | |
| Pazaitis, A., Kostakis, V., and Drechsler, W. (2022) Towards a Theory of Value as a Commons. International Journal of the Commons, 16(1): 248–262. | Academic Paper | The paper uses an interpretivist analysis to identify elements of a theory of value in the digital commons, borrowing from diverse theoretical perspectives, and utilizing the results of original research conducted elsewhere. The conceptualization of value as a commons places value itself in the commons, as a collective agreement, being part of the shared rules and norms guiding collective action | English |
| Manufacturing Futures: Beyond Business as Usual | Video | This is a 3-minute animation video based on research from the Reconfiguring the Enterprise: Shifting Manufacturing Culture in Australia project, funded by the Australian Research Council. The video is presenting the key findings of the report showing how just and sustainable Australian manufacturers are creating jobs, redressing environmental harms and benefiting communities through their work. | English |
