Making the invisible visible conference, University of Brighton, December 2010
By
Jim McLoughlin, Jaime Kaminski, Babak Sodagar
Cubist Research & Consultancy Group,
Social Enterprise & Socio- Economic Impact Research
The Business School,
University of Brighton
Applying the SIMPLE method of impact measurement
{ SIMPLE = S ocial Imp act for L ocal E conomies}

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Introduction
Social Enterprises in context
Research objectives and methodology
The SIMPLE Measurement model & the Quadruple
Bottom Line (4BL)
Case example of applying the methodology
Linking micro impact measurement to macro measures and sustainable systems.
Warnings re measurement & some conclusions

Office of the Third Sector, 6th March 2007

First System
Private
Profit oriented
Third System
Self Help, Mutual,
Social purpose
Second System
Public service
Planned provision
Pearce, J. (2003) Social enterprise in any town, Calouste Gulkenkian
Foundation: London

UK Government’s vision:
“To Promote dynamic and sustainable social enterprises, contributing to a stronger economy and fairer society. This is critical to the successful economic and social regeneration of many communities.”
Cabinet Office & HM Treasury(2006)The future role of the third sector in social and economic regeneration: interim report,, HMSO (December 2006)
Social enterprise is an idea “whose time has come.” Support for an
“aggressive growth strategy” in the sector.
Byrne,L (2009a) Cabinet Office Minister, Voice 09 Conference , February 2009
“ SEs are well placed to provide a blueprint for the kind of ethical and sustainable businesses that will help build a new, more balanced economy”
Liam Byrne (2009b), Cabinet Office Minister, Social Enterprise Summit , May 12 th , 2009
“Social enterprise is at the heart of a deep and serious reform of public services as part of the Big Society agenda”.
David Cameron, Prime Minister, as quoted in www.socialenterpriselive.com
18th
May 2010.

Clark, M. (2009) The Social Entrepreneur Revolution: doing good by making money, making money by doing good, Marshall Cavendish
How to build capabilities in the sector to compete effectively?
How to measure impact robustly, credibly and cost effectively?

“While many third sector organisations have a powerful story to tell, the social and environmental value of the impact is often underplayed. As we face tough economic times, It is now more important than ever that we allow for better recognition of those who create social and environmental value”
Byrne, L (2009c) Cabinet Office Minister, Social Enterprise Summit , May 12 th , 2009
“Whilst it is possible to measure the amount of money that social enterprises generate … it is far more difficult to measure the wider civic or social impact that social enterprises have and the benefit gained (financial or otherwise) by a community.”
Haugh, H. (2006) A research agenda for Social Entrepreneurship. Social
Enterprise Journal (1),1-12.

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To develop an impact measurement model and methodology for Social Enterprises
Exploring linkages between micro impact measurement and macro measures & systemic change – moving to more sustainable societies
Specific Considerations of the SIMPLE project:
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 To design and implement a social impact training programme for social enterprises
Practitioner focused
Build social enterprise management capabilities and contribute to improved performance of social enterprise

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Action Research Approach
◦ Problem centred, client centred and action oriented
(Lewin, K. (1946) Bryman, A. and Bell, E. (2007), Argyris, C., (1985)
◦ Reflective and experiential learning review processes (Kolb, D.A. 1984)
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Case Study Method
Over 60 social enterprise cases
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Applied SIMPLE ( S ocial Im pact for L ocal E conomies) Model
◦ A strategic approach to impact measurement (McLoughlin et al, 2009)
◦ Develop tailored impact measures

Embed It
Embed It
Tell It
Track It
Map It
Scope It
McLoughlin,J. Kaminski,J, Sodagar,B et al (2008,2009)

Scope It
SE impact context
Macro environment
Funding, policy, legal, social, technology context
Local environment
Local demographic, political, funding, competition, infrastructure, social needs, user / client influence
External drivers
MAP IT
Outputs
Outcomes
TRACK IT
Metrics
\
Financial
(+/-)
TELL IT
Impact
EMBED IT
Financial
(+/-)
Process change
SE mission, values, vision and
Missionled drivers objectives
Who is it serving?
Who should it serve?
Priorities regarding impacts
Organisational context
Ownership, governance, scale, location, product / service offer
Management decision making
Strategic direction, Operations, HRM & organisational culture, Financial,
Marketing, Technology strategy, Networks, alliances & partnerships
Internal drivers
\
Activities
\
Economic
(+/-)
\
Social
(+/-)
Economic
(+/-)
Process change
Social
(+/-)
Process change
The social enterprise
SE stakeholders
Who has a direct interest?
Who has the power to influence change?
What priorities and impacts are desired?
Stakeholder drivers
\
Environmental
(+/-)
Environmental
(+/-)
Process change
McLoughlin,J. Kaminski,J, Sodagar,B et al (2008,2009)

Mission/
Values
Drivers
&
The quadruple bottom line (4BL) - Summary version
SCOPE IT MAP IT TRACK IT
TELL IT
Outputs Outcomes Metrics Impacts
Financial Financial
EMBED IT
Process change
External
Drivers
Social Social
Process change
Internal
Drivers
Activities
Economic Economic
Process change
Stake holders
Environmental Environmental
Process change
Source: McLoughlin, Kaminski, Sodagar, et al (2009)

Key characteristics
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All are Social Enterprises – but different legal forms
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All are Social mission driven - different points of focus
( EG: lending to financially (and often socially) excluded, local community development, local economic regeneration, social enterprise lending, Entrepreneurship ).
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Different business models but nearly all UK CDFIs dependent on public sector subsidies or external grant funding
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All share “lender of last resort” role –mainstream banks reject
(people, businesses and areas excluded)
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Target markets – 3 main

Enterprise lending (often with training/mentoring support)
 Social Enterprises
 Personal Lending

Lord Turner, UK Financial Services Authority chairman,
Prospect magazine, August 2009)

Three of the 4BL prioritised for measurement in this SE

•
Businesses created
• Businesses safeguarded
• Jobs created
• Jobs safeguarded
• Business survival rates
Economic
Turnover created (Gross/ Net)
Turnover safeguarded
Benefits Saved
Social Return on Lending
Recycling of loans
CBS
Measures
Social Financial
• Socio- economic profile of beneficiaries
– gender, IMD, age, ethnicity, area etc
•
Sustainability ratios:
•Operating costs
• Business skills development
• Personal development & confidence
•Operational Self Sufficiency
•Loan fund Self Sufficiency
• Social capital & connectivity
• Entrepreneurship and business acumen
• Loan portfolio performance indicators:
•Portfolio growth
• Financial inclusion
•Portfolio at Risk
• Stories/reflections
•Write off rates

Mission/
Values
Drivers
SCOPE IT MAP IT TRACK IT
TELL IT EMBED IT
Outputs Outcomes Metrics Impacts
Financial Financial
External
Drivers
Process change
Social Social
Process change
Internal
Drivers
Activities
Economic Economic
Process change
Stake holders
Environmental Environmental
Process change
Strategic Review
Source: McLoughlin, Kaminski, Sodagar, et al (2009)

“Once the credit crisis is firmly consigned to corporate history, not only will it have sent some mighty business names to the wall, it will also have been responsible for fundamentally changing the way the business world operates”
“One such example may be in the way that corporate value is determined; will financial measures still be used in isolation as the measure of business value? This approach will soon be challenged”
( Rodger Hill, Head of Financial Management Advisory at KPMG in the U.K., http://www.kpmg.com/Global/en/Pages/default.aspx
, accessed Oct 4 th , 2010 ,

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What about the system’s ethical assumptions?
Moral Crisis: Neo-liberalism casino capitalism
- Now “ bankrupt” philosophy
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“The unhindered, rationally calculated, pursuit of self interest in free, competitive markets was not just economically efficient but morally right.”
Real culprit in this crisis
“Hyper-individualistic, materialistic hedonism of the entire culture”
Deep change needed – economic, constitutional & new moral culture.
Prof. Marquand, D (2009) The moral economy can’t be righted until we accept our own culpability, Guardian, May 27, 2009.

MACRO
Profits before principles
GDP
Unconstrained
Growth
Principles before profits
Social Sustainable
Product
Systems
Profit maximisation Social Impact Max
Min Environ. Damage
MICRO
Shareholder value
Conventional
Business Models
Stakeholder Value
Social Enterprise
Business Models
Business
Strategies

Enabling all people …to satisfy their basic needs and enjoy a better quality of life, without compromising the quality of life of future generations.
Securing the future (2005), HMG Cabinet Office, TSO

“I did something that challenged the banking world. Conventional banks look for the rich; we look for the absolutely poor. All people are entrepreneurs, but many don't have the opportunity to find that out.”
Muhammad Yunus Grameen Bank
The Chinese MEANING OF CRISIS –
“be aware of the danger-but recognize the opportunity”
‘
“There’s a battle outside and it is ragin’, It’ll soon shake your windows and rattle your walls. For the times they are a-changin’ ( Bob Dylan , January 1964)

First System
Private
Profit oriented
Second System
Public service
Planned provision
Pearce, J. (2003) Social enterprise in any town,
Calouste Gulkenkian Foundation: London
Third System-
Social Economy
Mutual, Social &
Environmental Purpose

Financial
Economic
Social Environmental
SROL
SROI
Monetisation picture ref: http://www.carnoc.com/

"We will find neither national purpose nor personal satisfaction in a mere continuation of economic progress, in an endless amassing of worldly goods.
We cannot measure national spirit by the Dow Jones Average, nor national achievement by the Gross National Product. For the Gross National Product includes air pollution, and ambulances to clear our highways from carnage. It counts special locks for our doors and jails for the people who break them.
The Gross National Product includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missles and nuclear warheads.... It includes... the broadcasting of television programs which glorify violence to sell goods to our children. "And if the
Gross National Product includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry, or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials... the Gross National Product measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile, and it can tell us everything about America -- except whether we are proud to be
Americans."
Sen. Robert F. Kennedy on March 18, 1968, speech at the University of Kansas

• Argyris, C., Putnam, R. and Smith, M. (1985) Action Science: concepts, methods and skills for research and intervention, San Francisco: Jossey-Bass.
•
Bryman, A. and Bell, E. (2007) Business Research methods , Oxford: Oxford University Press.
•
Byrne,L (2009a) Cabinet Office Minister, Speech ( press release), Voice 09 Conference , February 2009
• Byrne,L ( 2009b) Cabinet Office Minister, Social Enterprise Summit Press release, Cabinet Office, May 12 th , 2009
• Byrne, L (2009c) Social Enterprise Summit Press release, Cabinet Office , May 12 th , 2009
•
Cabinet Office & HM Treasury ,(2006) The future role of the third sector in social and economic regeneration: interim report, Cabinet Office & HM Treasury, HMSO (December)
• Clark, M. (2009) The Social Entrepreneur Revolution: doing good by making money, making money by doing good,
Marshall Cavendish
•
Coffey, P. (2006) Social Impact Measurement: Methodology Assessment , Initiation Report for the SIMPLE project,
SEL/University of Brighton: Brighton.
• Haugh, H. (2006) A research agenda for Social Entrepreneurship. Social Enterprise Journal (1),1-12.
•
Lewin, K. (1946) Action research and minority problems . J Soc. Issues 2(4), 34-46.
• Lewin, K. (1947) “Group Decision and Social Change." In T. H. Newcomb and E. L, Hartley (eds.), Readings in Social
Psychology.
New York: Henry Holt.
•
Maxwell,O (2007), Social Enterprise in Brighton and Hove: A profile of the sector with implications for future support and development, Brighton and Hove Business Community Partnership, In collaboration with the University of Brighton,
• Marquand, D (2009) The moral economy can’t be righted until we accept our own culpability, Guardian, May 27, 2009.
•
McLoughlin,J.,Kaminski,J, Sodagar,B,Khan,S,Harris R and Arnaudo,G. Mc Brearty,S.(2008) Measuring the Impact of
Social Enterprise:a Holistic Modeling Approach , Social Enterprise Research Conference, SERC) Proceedings, London,
June.
•
McLoughlin,J.,Kaminski,J, Sodagar,B,Khan,S,Harris R and Arnaudo,G. Mc Brearty,S.(2009)
A Strategic Approach to Social Impact Measurement of Social Enterprises: The SIMPLE Methodology , Social Enterprise
Journal , submitted May 2009)
• Pearce, J. (2003) Social enterprise in any town, Calouste Gulkenkian Foundation: London

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