Eight Principles of Social Value
There are eight principles that serve as a framework to assess and maximise the social value of an initiative or organisation. To increase understanding of the principles and how to implement them, Social Value Ireland has been hosting live workshops for members to discuss the principles in more detail. This post presents a brief overview of the information discussed at the April 2023 workshop which covered three of the principles. For a summary of the workshop on principles 1 and 2 see this previous post.
Principle 3: value the things that matter
Principle 3 states: “Making decisions about allocating resources between different options needs to recognise the values of stakeholders. Value refers to the relative importance of different outcomes. It is informed by stakeholders’ preferences”.
Valuation is important because it enhances communication, accountability and data-driven decision-making. When it is understood where the most value is being created (or perhaps where value is not being created) decisions can be made aimed at improving services and creating more value for stakeholders.
Remember that value is not the same as price! There are many ways to assess value. Asking stakeholders to rank a set of outcomes based on importance is one way to begin exploring value. Similarly, stakeholders could be asked to rate how important each outcome is on a scale from 1 to 10.
Whilst value does not necessarily need to be expressed in monetary terms, it can be helpful to do so because money is the most well-understood social construct to represent value. Expressing value in such a way provides a common language for discussing and comparing complex social outcomes between different groups. It also allows comparison with the financial investment needed to deliver the outcomes.
To learn more about different ways to assess value refer to the Standard for Applying Principle 3.
Principle 4: only include what is material
Principle 4 states: “Determine what information and evidence must be included in the accounts to give a true and fair picture, such that stakeholders can draw reasonable conclusions about impact”.
Materiality is considered at multiple points in the process of accounting for social value, including but not limited to, identifying the stakeholders and well-defined outcomes. It is important to only include what is material because it supports focusing energy, time, attention and resources on the things that matter most. Something is material if it is relevant and significant to stakeholders.
Relevance: Is it relevant and considered important to at least one of the following: your policies, your stakeholders, work of peers, societal norms, short-term financial impacts? If it is an outcome, consider if it is highly valued or important to a stakeholder group.
Significance: Is it significant enough that it would influence decision-making or behaviour? If it is an outcome, consider the number of stakeholders who experience change, or the extent of change experienced.
Determining materiality requires stakeholder consultation and professional judgment. To learn more about the concept of materiality please see the Standard for Applying Principle 4. Principle 5: do not overclaim
Principle 5 is about only claiming the value that activities being reviewed are responsible for creating. Identifying and naming these components increase credibility and provide information that supports decision making and service prioritisation. There are four key concepts to take consider to avoid overclaiming:
Attribution: Assesses how much an outcome is as a result of the activity under review, and how much is due to other organisations or interventions.
Deadweight: Estimates the amount of change that would have occurred without the intervention.
Displacement: Considers the possibility that an activity has created unintended consequences for other stakeholders. For example, an outcome created for a stakeholder group may unexpectedly displace the benefit experienced by another group.
Drop-off: As time passes after an initial intervention, the causality between the initial intervention and the continued outcome will lessen; drop-off describes this relationship.
There are many ways to measure each of these components including consulting stakeholders directly and reviewing relevant data in existing literature. More information relevant to Principle 5 can be found here. In addition to the information above, the live workshop also shared real-life examples of each of these concepts from Accredited Social Value Practitioners. Participants were also able to ask specific questions on how this information could be applied to their work.
If you are interested in learning more about applying the Principles of Social Value please consider signing up to be a member (if you aren’t one already) and participating in the next event.