efficient social valuation

I read "Measuring Social Value" with great interest, having been on both sides of the social sector grant application process. Before grad school, I worked at a community foundation and volunteered at a startup cultural nonprofit. Through our regional grant-makers' association, I was exposed to "strategic" grant-making, impact assessment, and capacity-building concepts and tools. Yet, both funders and grantees continually struggle with evaluating project value.

Last year, I attended a social impact consulting panel at the Net Impact national conference, where experts from FSG, Bridgespan, and GreenOrder also acknowledged the challenge of measuring impact. They and their clients rely heavily on customer satisfaction surveys, attempting to track people's subjective experiences of value creation. This is somewhat consistent with the Stated Preferences and Life Satisfaction methods that Mulgan mentions; he would probably approve of this relative and proportionate approach.

Mulgan seems to be saying that "objective" metrics are illusory distractions, and accounting methods should be differentiated by purpose and audience. To the former point, it was clear to my peers that social value is dynamic and relative; the problem was that we lacked a common currency or language. Market value is also dynamic, yet we agree to use monetary units, and the "law of one price" theory allows us to relate different assets. If social value is a market rate, then what's the currency?

To Mulgan's latter point, transparency is a virtue in assessing social ventures (or, really, almost anything). Just because only "brave" managers open up their books to competitive scrutiny doesn't mean that social sector accounting should be similarly siloed. My former employer freely publicized where the money went each funding cycle and, at least in general terms, why. Some foundations have a rubric that they can share with grant applicants, to get everyone on the same page and achieve the best project proposals and outcomes.

Personally, I'm attracted to triple bottom line (TBL) accounting as a potential common language for internal and external stakeholders. I know there are kinks to work out, but it's a worthy attempt. Among other things, it can help build efficient social capital markets. On a related note, the post below makes an important point about intrinsic value, but ultimately I believe that extrinsic (derivative, tradable, scarce) value subsidizes intrinsic value. I want to help make the performing arts profitable, in order to subsidize a transcendent communal experience.