There is no clear definition of Social Value and not one way to measure it. That is, because it is obliviously difficult to embed it in only one meaning and therefore measure it through one simple tool.
Geoff Mulgan, director of the Young Foundation(1), defines(2) the Social Value as ” the value that nongovernmental organisations (NGOs), social enterprises, social ventures and social programs create ” . There are many reasons why nowadays it would be beneficial to measure social value, however it is simply erroneous to transpose the economic principles into social field. For this reason, because measuring social value is hard, we are still not able to use it in order to influence the decision making process.
Dealing with these difficulties, Mulgan attempts to draw a path for measuring social value by using social value metrics. According to him, one of the current mistakes is to borrow practices from business and economics. In other words, treating social discount rates as equal to commercial ones (SROI social returns on investments) – that is, the assumption that a given amount of money will worth less in the future than in its present- it is non valuable for social sector: ” indeed, we should hope that people in the organisations give greater weight to the interests of future generations than do commercial markets ” (3) .
” Social value is not an objective fact. Instead, it emerges from the interaction of supply and demand, and therefore may change across time, place and situation ” therefore continuing with Mulgan’s words ” The field of social innovation can learn some lessons from business and economics. But it should not be naà¯ve ” (4).
Common framework for measuring Social Value
Mulgan claims that it is time to ” view social value as arising from the interplay of effective demand and effective supply ” . However, differently from the economic sector, measuring social value continues to be difficult for different reasons, mainly:
1. Lack of hard and fast laws and regularities in the social field;
2. There is not only one social value, but many social values;
3. Many social value metrics are unreliable;
4. Social Value is strictly linked with the problem of time.
Therefore, when we deal with Social value, instead of specific assessment tools, we need common framework able to link ” on the one hand, people and organisations with needs and resources, with on the other hand, people and organisations with solutions and services. Social value metrics are useful if they give shape to these markets, conversations and negotiations ” .
Following this approach, Mulgan within Young Foundation’s work, was involved in a project aiming to help the Nation Health Service (NHS) make better decisions while effectively allocate its resources. The tool created is ” a framework for thinking about value ” , requiring a series of judgements falling into four categories ” 1. Strategic fit (how well the proposed innovation meets the needs of the health service), 2. Potential health outcomes (including likely impact on quality-adjusted life years and patient satisfaction), 3. Cost saving and economic effects, 4. Risks associated with implementation. ”
Thus, measuring social value, according to Mulgan, does not mean create a specific tool, such as in the economic and business field, but building a common framework, in which ” what matters is the quality of the discussion and negotiation, and the depth of the learning several years later, when participants reflect on what worked and what didn’t ” (5) .
(1) The Young Foundation’s aim is to bring together insights, innovation and entrepreneurship to meet social needs. For more information click here
(2) G. Mulgan, ‘Measuring Social Value’ in Stanford Social Innovation Review, Summer 21. Link
(3) G. Mulgan Op. cit
(4) G. Mulgan Op. cit
(5) G. Mulgan Op. cit