From very early on in this research it was clear that a central role must be given to social enterprises themselves. There was no point in only considering theory or speaking to ‘high heid-yins’, the voices of social enterprise leaders were needed to reflect the actual work of social enterprises.
The process needed to be able to gather detailed data on what the organisation does, what it produces and for what people, while also not being so time-consuming to prevent a broad cross-section of voices being gathered. The answer lay in evaluative reports: Social Accounts/Audit (SAA), and Social Return on Investment (SROI).
For those who have never encountered one of these reports, I recommend you do. Conceived as a repost to traditional financial accounting which detail the income and outgoings of businesses in terms of financial value, Social Accounts concern themselves with the social value created by the organisation. SROI involves an almost identical process, only with the addition of a financial representation of the social value produced, using the market prices of alternative methods of achieving the same social outcomes.
The reports are written with meticulous detail, regarding the organisation’s work and the impacts it has on people and the environment. Many are more than 100 pages long, are backed-up with qualitative and quantitative research and externally ‘audited’ by certified individuals. Some organisations compile such accounts every few years, using them alongside tenders and grant applications, justifying their work to the community, and self-reflecting on the work they do and what it achieves.
Despite these benefits and potential applications, a number of respondents have warned of the dangers of engaging in this form of evaluation, sometimes described as a ‘non-core’ activity. While recognising the long-term benefits of engaging in the process, it was claimed that the time it could take to compile them could have detrimental short-term impacts in terms of both the social mission of the organisation, and its sustainability.
And then there is the issue of the financial proxies. An SROI ratio denotes the number of £s of social value produced for each £ invested in the organisation. In this way, social enterprises may be favoured by the tendering process as they claim to achieve many different targets simultaneously. One worry, however, is the validity of the proxies used to calculate the financial price of social value. For example: ‘volunteers valuing their ability to give back by contributing to society’ is represented by ‘cost to individual who volunteers in Uganda for 12 months’. This proxy may have been chosen for the purpose of maximising the financial representation of the social value produced, rather than the accuracy in reflecting the price of recreating the social value. This may be beneficial to the organisation in the short term but might have the effect of gradually reducing trust in SROIs over time.
My brief analysis of the pros and cons of these reports does not do justice to the arguments surrounding them. However, what I can say is that they have proved invaluable to me in gathering data on the work and outcomes of social enterprises in Scotland. So whatever else in the writing, reading or interpretation of them could be criticised, the social value to me and my work is substantial.
For more information on Social Accounting and Social Return on Investment, visit the following websites:
Social Audit Network- www.socialauditnetwork.org.uk
Social Value UK- www.socialvalueuk.org