Stanford Social innovation review
• Summer 2010
Over the last few decades,many people have attemptedto measure what is sometimescalled social, public, or civic value—that is, the value thatnongovernmental organiza-tions (NGOs), social enter-prises, social ventures, andsocial programs create.
Thedemand for these metrics hascome from all sectors: Foun-dations want to direct theirgrants to the most eectiveprograms; public ocials, poli-cymakers, and government budget oces have to accountfor their spending decisions;investors want hard data anal-ogous to measures of prot;and nonprots need to demon-strate their impact to funders,partners, and beneciaries.Metrics to meet these needshave proliferated over the last40 years, resulting in hundredsof competing methods for cal-culating social value.
Despite the enthusiasm formetrics, few people actually use them to guide decisions.In the nonprot sector, goodmanagers are very rigorousabout tracking costs and in-come. But few use sophisti-cated metrics to help allocateresources. Meanwhile, in thepublic sector, political judg-ment counts more than cost- benet assessments. In therare cases when decision mak-ers do use metrics of social value, it’s far from clear thatthey should.I’ve dealt with social valuemetrics in a variety of roles:as director of policy andstrategy under United King-dom Prime Minister Tony Blair; as director of the YoungFoundation, an NGO thathas created dozens of ven-tures, some for-prot, somesocial enterprises, and somepublic; and as an advisor tomany other governments. Inthese positions, I’ve seen notonly why social value metricsare ignored, but also how tomake them more useful.One recent project thatproved particularly informa-tive was a collaboration be-tween the United Kingdom’sNational Health Service(NHS) and the Young Foun-dation. The NHS commis-sioned the Young Foundationto develop a practical toolfor assessing service innova-tions and guiding investmentdecisions. The NHS is a vastorganization with a budget of around $150 billion, a work-force of some 1.2 million em-ployees, and contracts withmore than 30,000 social en-terprises. It needed a set of tools that would be both
Funders, nonproFitexecutives, and policy-makers are veryenthusiastic aboutmeasuring socialvalue. alas, they can-not agree on what itis, let alone how toassess it. their mainobstacle is assumingthat social value isobjective, Fixed, andstable. when peopleapproach social valueas subjective, mallea-ble, and variable, theycreate better metricsto capture it.
By Geoff Mulgan |
Illustration by Luke Best