There’s a spotlight on social value—why it’s important, ways to create it, and how to prove it. Everyone, from procurement and marketing teams to ESG and CSR leaders, is trying to nail the formula to create and measure social value.
With it becoming such a hot topic, we’re surprised there isn’t a standardised definition of what social value is. A lot of people still confuse it with social impact.
Contradiction abounds about the difference between social value and social impact. Some people say social impact is about short-term results and social value is long-term benefits. Others will tell you the exact opposite. So which is it?
We’ve worked with hundreds of folks across ESG, CSR, marketing, procurement, and community teams to understand what social impact and social value mean to them. And here’s where we’ve landed.
- Social impact is about tying specific initiatives to immediate outcomes. (i.e. We funded the development of a community garden that provided ##kgs of food to ## families this year.)
- Social value is about the long-term benefits your business creates for society and the environment. (i.e. In addition to the kilos of food the garden will provide every year, we aim to tie it to other outcomes like long-term food security, improved health, lower healthcare costs, reduced absenteeism rates, enhanced social well-being, etc.)
Reasons to measure social value
But why do businesses suddenly care so much about measuring social value? Motivations vary across different roles and business types.
- Brand and marketing leaders want to infuse social impact and value into public-facing communications so they can prove the business is walking its talk and living up to its purpose.
- ESG and CSR leaders care about showing the impact of their work to investors, boards, executives, and other stakeholders.
- And procurement teams now have to demonstrate social value in order to win tenders. So they have to figure out how to measure, report on, and forecast social impact & social value.
For some—like those bidding on national government, local authority, or large private sector contracts—measuring the social value of their work in ££ is literally a legal requirement to win work and meet contractual demands.
“Accountability is undoubtedly under the spotlight – and rightfully so. Measuring, evaluating and reporting performance is key to an organisation’s success, and figures related to Social Value really do matter. That’s because behind every figure there is an actual life: a person, a family and a community. Moreover, this data can also help you to win bids and tenders where Social Value is an important part of the scoring system.” Guy Battle, Founder of Social Value Portal
Quick Social Value History Lesson
- 2012: Social Value Act was passed to require people who commission public services to think about how they can also secure wider social, economic, and environmental benefits.
- 2018: Social Value Act was reformed to require governments to explicitly evaluate and report on the social value of major contracts.
- 2020: UK government established the Social Value Model for purchasing agents to consistently evaluate social value policies when awarding a contract.
- 2021: Government implemented the Social Value Model and it now must be applied to all procurement activities.
Challenges with measuring social value
Unfortunately, quantifying social value is really hard. Social change is complex and multidimensional. And businesses don’t have a universal methodology they can use to measure the social value they create.
So, everyone reports on social value differently. Not just from business to business. Even within a company, separate teams often take completely different approaches to tracking social impact and value. We even see reporting structures change month over month as people try to figure out the “right way” to report on social value.
This means there’s no standardisation across the data. It takes a really long time to pull your reports together. You can’t set informed goals or KPIs. And you struggle to get the data you need to paint a picture of the social value you create.
Choosing the right impact framework for your business
Putting an impact reporting framework in place makes the tough job of social value measurement a little bit easier.
A framework gives you an agreed-upon set of data points, allowing you to get the data you need faster. It also gets everyone on the same page and provides a platform from which your teams can set targets and make decisions.
Which impact framework you start with depends on your aims.
- Are you using social value to boost reputation and customer engagement? Do your customers and audiences love multimedia content? Think about incorporating qualitative data and stories into your social value reports.
- Do you need to tie your CSR or ESG efforts to specific social and environmental goals? Choose a framework tied to the 17 SDGs.
- Does your procurement team need to prove social value at a local level? You need a reporting framework that looks at regional or community impact.
Don’t take a siloed approach when choosing your framework. Rather, take the time to understand everyone’s objectives and select a model that will work for all.
4 common impact frameworks to measure social value
Dozens of reporting frameworks exist. Maybe even hundreds once you consider all the bespoke solutions that businesses have developed on their own.
These are four of the common frameworks that many businesses use, which are useful as a starting point:
- The National TOMs
- SDG Framework
- Business for Societal Impact (B4SI)
- B Impact Assessment
The National TOMs (Themes, Outcomes, Measures)
The National Social Value Taskforce developed The National TOMs framework specifically in response to The Social Value Act. It’s becoming a widely accepted standard across the UK to measure social value.
Backed by the TOMs System, Social Value Portal is a useful tool which helps organisations measure, report and amplify their social value. You can get started using The National TOMs here.
Pros of The National TOMs framework
- It frames social value in ways that matter to communities across the UK.
- It contains financial proxy values to measure outcomes.
- You can apply it to create lasting impact.
The National TOMs framework works well for businesses:
- That need to measure social value in terms of ££.
- Embedding social value into their procurement and management processes
- In development, housing, education, health, and public services industries
- Serving central and local governments, and third-sector organisations
Sustainable Development Goals (SDG) Framework
The 17 SDGs provide clear objectives for businesses committed to protecting the well-being of people and the planet. But goals are just lofty dreams without a system to measure progress.
So the Inter-Agency and Expert Group on SDG Indicators (IAEG-SDGs) developed a global framework with 231 indicators to measure social value in the context of the SDGs. You can access the full framework here.
Pros of the SDG Framework
- The SGDs make economic sense; achieving the SDGs could deliver £9.8 trillion worth of business savings and revenue by 2030.
- They support global accountability to develop sustainably.
- It’s widely accepted so businesses can use it to track social value across commonly understood benchmarks.
The SDG framework works well for businesses:
- With global operations or serving global clients.
- Working with national or local governments.
- Focused on sustainable development initiatives.
- Working with multiple stakeholders.
- Concerned about risk mitigation.
- With long-term outlooks.
Business for Societal Impact (B4SI)
The B4SI framework provides a global standard for businesses to manage and measure corporate social impact. It organises social activities under three pillars—inputs, outputs, and impacts. Here’s a guide to getting started with the B4SI Framework.
Pros of the B4SI Framework
- Apply them at your own pace.
- You can choose which parts are relevant to your business.
- B4SI offers a member network so you can connect and learn from other businesses with similar goals.
The B4SI framework works well for businesses:
- Of any size or industry
- Specifically addressing social issues
- With heavy CSR initiatives
B Impact Assessment (BIA)
B Lab developed the B Impact Assessment (BIA) as a means to certify companies as B Corporations. Businesses can apply this framework to evaluate how their operations impact employees, communities, environments, and customers. It uses 250 questions to examine your company’s policies, practices, outputs, business models, and positive outcomes. You can get started with the BIA here.
Pros of the BIA framework
- It’s a digital, interactive tool that lets you work at your own pace.
- It aligns with long-term objectives.
- You can apply it to products, processes, and business structures.
- It’s increasingly recognised by consumers as a way of communicating social value.
The BIA framework works well for businesses:
- Seeking B Corp certification.
- Committed to being a force for good.
- Focused on measuring and reducing the total impact of their operations.
Any of these frameworks can be a great starting place. None of them will be perfect. You’ll likely evolve the way you measure social value over time and continue to mature your framework to meet your needs.
ActionFunder’s approach to impact measurement
We’ve worked with hundreds of grassroots non-profits tackling social and environmental challenges at the community level. Over the last 15 years, we’ve developed our own bespoke impact framework to measure their social impact. Our approach:
- Aligns with the SDGs.
- Delivers quantitative outputs and outcomes.
- Balances quantitative and qualitative data.
- Is available at the touch of a button via a user-friendly dashboard.
- Includes real-time social updates that capture community impact.
Innovations in social value measurement
Social value is really just in its infancy. As frameworks and tools continue to innovate, we’re seeing new solutions on the horizon that will help businesses better plan, create, and track social value.
For instance, until recently, businesses have only been able to measure social value in retrospect. Tools are now coming to the market that let companies forecast value.
Imagine being able to decide the impact you want to create and then automatically building a plan to make it happen. That’s precisely what ActionFunder’s new Community Discovery Tool allows. Procurement teams use it to forecast the social impact of specific community investments so they can include that data in bids. If they win the bid they simply set the fund live to quickly and easily realise those forecasts. Creating social value doesn’t get much easier than that.
If your business needs to proactively forecast, quickly create, and accurately measure social value, get a demo of ActionFunder today.