Jun 08 2009
Social Accounting and how it can help your social enterprise
Malcolm and I attended a free course run by the Scottish Social Enterprise Academy called “Prove, Improve and Account: Social Accounting” last Wed and Thurs and learned some good stuff that could help you and your social enterprise with funding and motivation.
What is social accounting?
The idea is to measure your organisation’s performance in 3 areas:
- social impact
- environmental impact
- economic impact
A traditional business would generally measure only its economic impact, or how much profit it made. Many businesses are starting to add in their environmental impact as well, looking at how their use of resources — office paper, lights, building energy efficiency for example.
With social accounting, you add the third element, the “social” impact, which looks at things like how many people’s lives you’ve affected and the ripple effect you’ve had in the community.
Malcolm calls social accounting the George Bailey Effect: what would life look like for people around you if your organisation had never existed?
Why should I bother to do it?
The main purpose of social accounting is to help your organisation or business do 2 things:
1) Prove the value of what you do — show what actual difference your work is having
2) Find areas to improve so your making even more of an impact
I’d add a third reason: to inspire and motivate you and your colleagues as you tackle the challenges of being a social enterprise.
It can be so easy to get caught up in the daily things to do, so it’s rejuvenating to step back and see the bigger picture of just how big the difference your blood, sweat and tears are making.
How does it work?
Only you can decide what you want to measure, for which things you want to hold your organisation accountable. The best way to do that is to start with your Mission, Values, Objectives and Activities. We spent most of the 2 days just on these, and even then, we’re planning to hold an all-day session in a few weeks to finish drafting these.
Your mission is the core of what you do. It tells your employees, volunteers, and funders what you care about and why your work matters.
To be honest, our mission statement has gone through so many changes and I’m still not completely happy with it. What helped me this time is to realise that it’s what you say internally as an organisation, not what you necessarily say to your guests or customers.
So the latest version of our mission is:
Promoting happiness by teaching skills that develop self-reliance and eco-friendly living.
Most everyone in the class was skeptical about the word “happiness” and the idea of promoting it, but that’s what we care about. On the other hand, we probably won’t put it quite like that on our brochures, since we don’t want to come off hippy-dippy. That’s where the “elevator pitch” comes in, the 30-second description of what we do that’s aimed at our target audience which should sound a bit different from the mission.
This is a huge area, so if you want to find out more, check out FirstPort’s Resource Library.
Next: decide what you want to measure
Once you’ve got your mission, values, objectives and activities in place, decide how you want to measure your success in those areas. In our exercise, we broke down the impacts into the 3 areas again: social, environmental and economic.
For Touchwood, one social impact I want to measure is how much people’s quality of life or happiness has increased as a result of coming on a holiday with us. So we will design a questionnaire to be given to guests that ask them to rate this in some way.
An environmental impact will be to reduce food miles on Orkney by X%.
An economic impact will be assessing the “local multiplier effect“, or how much money filters to other businesses as a result of people coming on a Touchwood Project holiday.
Since we’re only just beginning, most of these indicators are hypothetical and won’t be put into place for a few years. It’s just another example of how social accounting is designed entirely for you, your needs and what level of development your organisation has.
Where can I get Social Accounting training or learn more?
Social Accounting is far too big a subject for me to cover in a blog post, so find out more by taking a course. Our course was facilitated by Clive Sheppard via the Scottish Social Enterprise Academy, which offers these sessions free at your location if you can pull together 8 attendees. So find yourself some other people interested, and contact SSEA to set up a course straightaway.
The materials were developed by the Social Audit Network and sponsored by the brilliant New Economics Foundation (I love their tagline: “Economics as if people and the planet mattered.”) The nef website in particular has some excellent resources and a newsletter.
And if you’ve already done social accounting in your organisation, share it here so we can hear what it was like.
Related Posts :
If you're a social enterprise -- business with a social purpose whose profits go entirely toward ...
This evening I'm working on the "Vision, Mission, Objectives" part of the business plan. I disco ...
