Developing social impact measurement for social enterprise

Social impact measurement represents both a strength and weakness for ‘voluntary, community and social enterprise’ (VCSE) organisations. This tension occurs because social impact measurement approaches seek to demonstrate the social value that VCSE organisations create; but at the same time they require skillsets (research), resources (in time and finances), and commitment (from key stakeholders) in order robustly to be carried out. This tension is further exacerbated by the lack of definition around what constitutes social impact (Sairinen and Kumpulainen, 2006) ; what social value creation looks like as a construct and a process (Emerson, 2000); and the plethora of different (and complex) methodological approaches to social impact measurement that exist globally and in the UK (Inspiring Impact, 2016; Millar and Hall, 2013; Hehenberger et al., 2013). This is problematic for the VCSE sector as the demonstration of the social impact that they deliver is increasingly being viewed as strategically critical in relation to gaining access to resources, achieving legitimacy and as a process of organisational development (Nicholls, 2009; Clifford et al., 2013). There is therefore a need for a concerted effort to be made not just in convincing social enterprises (and wider organisational groups) that social impact measurement is required, but also to develop tools and methodologies that can cater to the varied needs of such organisations, whilst still retaining underlying common frameworks and principles. This chapter seeks to explore these issues through the building of a common framework based upon the European Commission’s GECES sub-committee report on social impact measurement that was published in June 2014 and also the more recent work of Noya (2015) in exploring social impact measurement in social enterprises for the OECD. These publications were produced to bring a cohesion and consistency to impact measurement across the EU Member States, not only in the operation of grant and investment funds under the Social Business Initiative, but also more widely across the social economy. The authors view the utilisation of the GECES framework in the development of a common approach to social impact measurement across the UK as fundamental to the development of the VCSE sector, particularly now that the Public Services (Social Value) Act 2012 obliges public service commissioners to consider social value in the commissioning and procurement of services. In addition to public sector demand, there is also a need for robust impact measurement in the venture philanthropy and social/impact investment markets (Barraket and Yousefpour, 2013; Nicholls, 2010). This is because currently these markets are characterised by a lack of data and information asymmetry (Hazenberg et al., 2014) and robust impact measurement can support the development of new investment products that can assist the VCSE sector to grow (Nicholls, 2010; Wood et al., 2012; Barraket and Yousefpour, 2013). The chapter begins by exploring definitions of social impact, before moving on to examine the recommendations of the GECES report, before concluding with the proffering of a ten-point code that it is suggested all in the sector should adhere to when conducting social impact measurement.