Measuring Social Value to Advance Social Innovation

This Week’s Topic: Capitalization and Impact Assessment for Social Innovation

Measuring Social Impact: Measuring Social Value (link to the referred article presented below)

Geoff Mulgan, the article’s author, acknowledges the need to quantify, through an effective metric, social value that results from nongovernmental organizations, social enterprises, social ventures, or social programs. A useful metric ensures adequate justification for spending, funding for effective programs, and demonstrates the extent of impact created. Despite the need and want to use adequate metrics, Mulgan points out both managers of socially impactful organizations and their relevant stakeholders (e.g., foundations, funders, beneficiaries, policymakers) fail to use sophisticated metrics that sufficiently allocate resources as informed by levels of social impact, or value, created.

Mulgan offers his conceptualization of a more effective and sophisticated metric for social value, and argues a sophisticated metric should “think about social value as the product of the dynamic interaction between supply and demand in the evolution of markets for social value.” In other, perhaps more simple words, social value is created in the case in which the something that is created is paid by some willing someone.

Mulgan argues social value metrics serve the following three roles: external accountability, internal decision-making, and assessment of broader social impact. The metric mentioned below assesses social value associated to “internal decision making;” other metrics are required for the remaining roles. Mulgan suggests organizations that assess social value to inform internal decision-making should measure the social value using a Likert scale (i.e., 0-5), rating the following four categories in relation to the social value created: Strategic Fit, Potential positive outcomes, cost savings and economic effects, and risks associated with implementation. Mulgan suggests relevant stakeholders adopt their own frameworks to measure social value, and then engage in useful discussions with organizations (organizations’ stakeholders) to share and reform frameworks for better future measurement.

Effective measurement tools provide adequate means to assess social impact, and inform ways to innovate, making this article especially relevant for this week’s topic. I personally am drawn to this topic as I find it provocative to measure social value. I admire Mulgan’s ambition to propose effective measurement of such an intangible concept like social value, but understand the necessity to measure the concept. Providing frameworks to measure any concept, including social value, allow social enterprises and other relevant organizations to innovate more accurately (innovation guided by clearer measurement), rather than to rely on beliefs as a means to measure social value.

In the work that I have done in providing educational panel discussions, or social awareness campaigns, arguing the social value of my efforts has been a challenge, although I have used other metrics to attempt to do so. As I continue attempting to provide social value to my community, using sophisticated metrics will equip me with better guidance to do so.

Question: When measuring social value, what else should be included in a metric that Mulgan failed to mention?

Article Link: www.ssireview.org/articles/entry/measuring_social_value