Demonstrating Social Value Context
Scotland’s Social Enterprise Strategy
As fair, inclusive, and impactful businesses, social enterprises should ultimately be measured on both their social and commercial performance. We must therefore ensure that social enterprises are able to produce the evidence they need to show they deliver well, produce impacts (social, economic and environmental), and live up to appropriate values and practices.
This is vital if social enterprises are to extend influence, make better decisions and ensure public accountability. It is also vital if we are to generate better evidence about the impact of the social enterprise sector and in doing so ensure good policymaking. The importance of demonstrating social value has been widely recognised within the sector. However, despite the availability of various performance frameworks, quality systems, and impact measurement approaches, social enterprises have generally been slow to embed effective practices.
There are some barriers to overcome before further progress can be made. The field is currently complex and confusing to the sector, with differing approaches and expectations on the part of purchasers, funders and investors. Current impact measurement methodologies tend to be perceived as inherently complicated and beyond the skillset and means of most social enterprises to implement, particularly those that are relatively new and small. There is limited support that social enterprises can access to help navigate their options and implement effective systems.
Our ambition is for all social enterprises to be able to demonstrate social value in a holistic, transparent and compelling way.
We will explore approaches to developing a flexible and holistic Scottish model of impact measurement. This could provide a standard for tracking and reporting on the value that social enterprises deliver in their market, the workplace, for their supply chain, local economy, communities, and environment. It could enable even the smallest of organisations to provide a balanced account of their performance and impact.
We will work with funders, purchasers and regulators to encourage reporting requirements that are co-ordinated, consistent and proportionate, whilst minimising duplication. Over time, we will consider extending the requirement for all social enterprises to produce a straightforward Annual Social Report in a consistent format that is aligned with the annual reporting requirements of Scotland’s main regulators.
We will work with partners to promote awareness and commitment to social impact measurement and to help develop the associated understanding and capabilities of social enterprises. Recognising that there is more to be done, further investment will be required in the support models, technologies and advice available to the sector.