Trying to calculate social value

When The Good Consultancy started up in 2011, the idea was to create a consultancy that could help organisations to win the funding that would allow them to make a positive social impact. It made sense for us to start looking at the impact we, and our clients, have. And perhaps start to measure it.

The start of something beautiful

The social value measures we have used for 2014/15 are quite simplistic, reflecting the fact that we had not yet established the systems and processes for measurement. But they are a starting point for years to come. The thing with social impact measurement is that going through the process is often as important as the numbers you generate. By starting to measure, you start to question. By questioning, you take on extra perspectives that improve what you do.

As a consultancy, and a specialist in bidding, we have an additional challenge in that the social value we create is through the improvements and innovations we inspire for our clients, and the impact of driving up quality and efficiency. These are contentious areas for social impact measurement, but ones we need to explore if we are to keep adding value to our clients' activities.

How we reached our figures

  1. Our fees: First we totalled up the value of fees we have been paid by clients. This included projects we won and lost, and projects that delivered a direct social impact or were strategic.
  2. Won Contracts: Then we totalled the value of contracts that we helped our clients win. We only included contracts where our involvement was significant.
  3. Social impact: We calculated the outputs and outcomes budgeted in each contract. We then used the Social Value Bank and Value Calculator, developed by HACT and Daniel Fujiwara, to find the potential social impact of these contracts.  We found that these contracts, once delivered, will give effect £643,000,000 of social impact.

How we could improve our social impact measurement

The above was calculated as a quick and easy way for us to understand the impact our clients have. It is not a statement of the social impact of The Good Consultancy itself.

When calculating this figure, we followed HACT guidance. This suggests, for example, not to count the social value of training delivered by our clients to customers who end up in an alternative positive outcome, such as a job. If jobs are what you are interested in, then jobs are what you value. In that spirit, here are a few more things to bear in mind:

  • Deadweight: Factoring in deadweight is the way you determine how much of your impact would have happened anyway. We used the automatic deadweight figure supplied as part of the HACT Value Calculator, but our deadweight could be more. There is also the argument that, if our clients did not win, another organisation would have delivered similar services. We were interested in defining the social value that our clients deliver, but we could have considered additional deadweight to focus on the extra social value that our clients would deliver compared to the next best option.
  • Displacement: When your organisation only moves the positive social impact rather than creates it, there is displacement. For example, you may move young people into jobs, but at the expense of others in the jobs market. Our clients’ contracts were for the creation of new jobs, apprenticeships etc., but we have to be aware that displacement is always possible.
  • Attribution:  Attribution is how you determine who else might have contributed to your social impact. For us, any positive social impact we may have is achieved in partnership with our clients. It may also be the case that the social impact our clients achieve is in part due to complementary services in the area. An example would be where a lone parent is enabled to find employment, partly due to skills training, but also partly due to the provision of childcare support. Both of these services contributed to getting the parent into work.
  • Drop off: Drop off is how you account for the fact that in future years your impact is more and more likely to be influenced by other factors. In this case, much of the impact we have will happen in future years rather than happen now, but there could still be drop off.
  • Net Present Value: Usually, future benefits are viewed as less valuable than present benefits. Hence, some organisations will value outcomes they will produce in the future less. 

So what's next?

Our plan over the next 12 months is tackle attribution and deadweight in our contribution to the social value our clients create. This is where it starts to get really interesting.

 

The Good Consultancy provides expert bid writing and bid management support for charities, social enterprises and companies who want to win funding to deliver social impact. To find out what we can do for you, please get in touch.