Thursday, January 31, 2013

Cost, Value and social metrics

“What is a cynic? A man who knows the price of everything and the value of nothing.And a sentimentalist, my dear Darlington, is a man who sees an absurd value in everything, and doesn't know the market place of any single thing.”

Oscar Wilde’s oft quoted lines came to mind when I was listening to today’s Social Finance Connects webinar on Social Metrics, Outcome Evaluation and Social Return on Investment. We heard from Stephanie Robertson of the SiMPACT Strategy Group and Tessa Hebb of Carleton University’s 3ci program, both of whom have authored reports on social metrics.

Ms. Robertson began by stressing that social impacts happen in all sectors – for profit companies, not for profits, government agencies. This is an important point to note as much current discussion focuses on impact investing, particularly social impact bonds, but measuring social and environmental return is extremely important to SRI investors owning publicly traded corporations.

“In the experience of the author, social metrics are measures of activity, outputs, outcome and
impact. They can be used in relation to anything that is ‘social’ in nature. They can be applied to activities well beyond the scope of the non‐profit sector (i.e. public, private, and coproduction activities). Every organization in every sector might use social metrics to plan,
measure and evaluate organizational performance as well as to plan, measure and evaluate the impact of operations and corporate decision‐making upon third parties.”

She went on to discuss the need to streamline terminology so that all sectors could use consistent social metrics, and all could contribute to the dialogue as it develops. The more complex questions are not about the cost of inputs and outputs, but the value of outcomes and impacts. One of the goals of SROI is to help move the conversation from ‘cost’ to ‘value’.

Due to time constraints, Ms. Robertson finished up quickly, but her report can be read here.

Next up was Tessa Hebb presenting the 3ci survey on social metrics. The survey was completed in 2011 and Ms. Hebb noted that many changes have occurred in the past 24 months. The survey looked at understanding social metrics, which social metrics tools are being used, common barriers to using social metrics, stakeholders in the process and standardisation and the role of government in social metrics development. In Canada, we are considering a wide variety of social metrics. In addition to SROI, some of the other metrics mentioned by interviewees in the report were Asset Mapping, GIIRS, Google Analytics, IRIS and Sustainability Reporting. Ms. Hebb pointed out that the respondents were split on whether social metrics should be standardised. Much comment was generated during the webinar on this subject. It appeared that people were in favour of standardised terminology, but wanted to retain flexibility to create customized metrics for their organization.

Ultimately, we want to use social metrics to help us tell a story, and we must be wary of Oscar Wilde’s cynics who will focus only on the numbers generated by social metrics tools.

For more information on social metrics, check out SROI Canada, Social Finance and the Carleton 3ci site.

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