Module 1: Looking for Longitude

Throughout the history of the world people have navigated our seas and oceans. The story of the search for longitude in western navigation is one that beautifully illustrates the search we now face to  measure social value, and how the impossible can be achieved with collective effort.  We acknowledge the expertise and long history of all the world's navigators - with the right measures we can reach our destinations.

“Dirty weather,” Admiral Sir Clowdisley Shovell called the fog that had dogged him twelve days at sea. Returning home victorious from Gibraltar after skirmishes with the French Mediterranean forces, Sir Clowdisley could not beat the heavy autumn overcast. Fearing the ships might founder on coastal rocks, the admiral summoned all his navigators to put their heads together. The consensus opinion placed the English fleet safely west of Ile d’Ouessant, and island outpost of the Brittany Peninsula. But as the sailors continued north, they discovered to their horror that they had misgauged their longitude near the Scilly Isles. The flagship the Association struck first. She sank within minutes, drowning all hands. Before the rest of the vessels could react to the obvious danger, two more ships, the Eagle and the Romney, pricked themselves on the rocks and went down like stones. In all, four of the five warships were lost. The tiny Scillies islands became unmarked tombstones for two thousand of Sir Clowdisley’s troops. 

The demise of Sir Clowdisley’s fleet capped a long saga of seafaring in the days before sailors could find their longitude. Page after page from this miserable history relates quintessential horror stories of death by scurvy and thirst, of ghosts in the rigging, and of landfalls in the form of shipwrecks, with the hulls dashed on the rocks and heaps of drowned corpses fouling the beaches. In literally hundreds of instances, a vessel’s ignorance of her longitude led swiftly to her destruction.”[1]

[1] Sobel, Dava, ‘Longitude. The True Story of a Lone Genius Who Solved the Greatest Scientific Problem of His Time’, 2011, Harper Perennial, pp 11-12

Module 1 is our introduction to social impact measurement. Develop your understanding of why measuring social impact is important and why 'wellbeing' is synonymous with social impact.

Lessons

Lesson 1: An introduction to social impact measurement

What is social impact?

The following is the definition of social impact straight from the ‘Measuring and Valuing Social Impact – Guidance on Approach and Methodologies’ Handbook distributed by Standards Australia.

“Social impact is the change in the lived experience of people beyond financial impact that can contribute to systemic or enduring change.

Note 1 to entry: The social impact of an initiative is usually defined in reference to –

a) Effects resulting from the initiative;

b) Effects experienced by beneficiaries and all others affected;

c) Both positive and negative effects; and

d) What the situation would have been without the initiative.”

Simply put, social impact means how people's lives change, in ways that both include and go beyond money, because of a certain intervention. Imagine an organisation building a library in a community. The social impact would be the education people gain from reading the books, children developing a love for reading, or adults connecting with likeminded community members. Some impacts might be good, like increasing literacy, but there might be negatives too, like a local bookstore struggling because more people borrow books now instead of buying. When talking about the social impact, we also think about what would've happened if that library was never built. Perhaps the community would have found alternative ways to achieve those outcomes.

Why do we measure social impact?

Since the conclusion of World War II, global attention has centred on economic indicators, such as Gross Domestic Product (GDP), as a measure of human progress. As a result, resource allocation and priority-setting have largely been dictated by monetary factors. Yet, there is a growing global recognition that this focus on financial value has led us to make decisions at the cost of our personal, community and environmental wellbeing. The issue isn't necessarily that these economic metrics are flawed in themselves, but that they don't factor in social or environmental implications. Most people agree there is more to life than money, and this is not reflected in our decision making.

As a result of this recognition, social impact measurement has gained momentum. The imperative for measuring social value is to enable resources to be directed to where they have the greatest impact for the wellbeing of people and the planet. Financial metrics are not unimportant, but they are merely an input towards this goal. At present, there is an opportunity to pursue social and economic value as complementary objectives rather than competing ones.

Below are some examples of why different sectors measure social impact:

Lesson 2: What do we mean by ‘wellbeing’?

Ultimately, we are measuring social impact to ensure the wellbeing of all people.

Before we dive therefore into how to measure social impact in terms of wellbeing, we need to first start by understanding what we mean by it.

Wellbeing is a holsitic state of functioning, where you have the capability and opportunity to live a life you value.

It is not about being happy all the time. It is about being in a position to weather the storms of life. Wellbeing is not an emotion and certainly not as dynamic as one. Our wellbeing does shift, but it takes significant changes or enduring circumstances to change our wellbeing.

Across the existence of humanity we have developed ways to describe and foster wellbeing. Starting with Aboriginal and Torres Strait Islander people who understand our wellbeing to be interconnected not just between all living things but also through all of time. Western philosophy is indeed rich with the exploration of what it means to live a ‘good life’. Aristotle’s ‘Eudaimonia’ literally translates to a state of “good spirit” in which he describes wellbeing, or Eudaimonia as the ‘chief good’ and all other pursuits, such as wealth, virtue, honour, are only inputs into the state of wellbeing.

In our definition above, there is an emphasis on the subjective nature of wellbeing “live a life YOU value”. That is because we experience wellbeing on a personal level. It is not for someone else to determine how you feel, or how you should feel. This is a hint for how it may be measured…but we’ll come to that later. This definition recognises that what matters for each of our wellbeing, can look very different across contexts. For example, access to sufficient income may be a critical input for people’s wellbeing, but in trade-based societies it matters little. The nuances of what matters and how much things matter can be different down to the individual.

Therefore, when it comes to measuring social impact in terms of wellbeing, an appropriate methodology needs to be able to reflect the nuance of what matters across different contexts.

Lesson 3: Applying a wellbeing approach to a targeted program

It is often easy to get people to agree that ultimately, social impact should result in the wellbeing of people. But when it comes to measuring the impact of programs, most approaches will focus on the target outcomes only, inferring that they ultimately contribute to wellbeing. These approaches will measure how effectively the target outcomes were achieved, instead of measuring to ensure they are the best outcomes to be focusing on. We call this measurement, self-fulfilling.

Instead, adopting a wellbeing approach to all interventions provides the following benefits:

1. Ensures, overall, a positive impact is being achieved. Focusing on target outcomes may not identify that they are being achieved at the expense of other aspects of people’s lives.

2. Identifies opportunities to maximise impact and manage risk - provides a holistic profile of the needs and aspirations of people to identify if there are opportunities to target other aspects of people’s lives – or at least identify barriers and risks to your program outcomes.

Lesson 4: Beyond financial measures of social impact

Recognising the goal of social impact is to put people in the best place to achieve wellbeing necessitates a consideration of how social impact is valued. The purpose of social impact valuation is therefore to provide a common yardstick that enables decision-making across different contexts and initiatives. For example, valuation can be used to justify the investment into specific programs, or used to inform decision-making and budget allocations.

When it comes to social impact metrics and valuation (more on this later in the course) approaches generally fall under the following two methods:

  • Monetisation: seeks to place a monetary value on social impact.

  • Non-monetisation: seeks to measure value in terms of a non-financial unit of value.

The monetisation of social value is often favoured as its a unit of value we recognise, but also, it reduces decision making to a single dimension. However, regardless of the integrity of the different methodologies (such as Cost Benefit Analysis, Social Return on Investment and Impact Weighted Accounts) the monetaisation of social value comes with inherent limitations.

  • inability to accurately represent the value of things to our wellbeing

  • disincentivises investment in certain groups of people, often out most vulnerable - for example initatives for young people have greater capacity to deliver a return when compared to initiaitves for the elderly, simply due to having a greater expected life time. It can also makes it hard to justify investment in better end of life care or people with severe disabilities where outcomes achieved may not reduce the level of care (cost) required.

  • reinforces the financial system as dominant – the gap between the priceless value of things for our wellbeing will continue to be scarified for financial gain.

  • based on judgment – while aiming for rigour, the methods leave a great deal for personal judgement.

  • not comparable – despite guidance that warns against using it for comparative purpose, it is increasingly used as a comparative tool for organisations competing for contracts or philanthropic funds.

Taking a wellbeing approach to social impact measurement, as is the focus of this course, prioritises measuring social value in non-monetary terms. This recognises that the value of our wellbeing, and aspects of it such as the value of our relationships, culture or connection to Country, cannot be accurately represented as a financial value. The consequence of only using a monetisation approach is the tendency to undervalue and underinvest in initiatives that don’t align strongly to financial proxies. For example, we often hear that arts and culture is an under-resourced sector, yet we have large bodies of research that demonstrate the strong link between arts, culture and wellbeing.

As with other non-monetary methods, a wellbeing approach still provides a common yardstick to be able to compare the creation of social impact, but does not assume that all social impacts can be accorded a monetary value. So, while we focus on a wellbeing approach in this course, both non-monetary and monetary methods have a role to play in social impact valuation, just like lattitude and longitude. Where a financial return is called for, the simple answer is to use both. The majority of learnings from this course will support you in working with both monetisation and wellbeing valuations.


QUESTION & ANSWER

Exercises: Log Book Entry 1

Head to your Impact Log Book to see the activities in relation to module 1.

Additional study

Here are some additional resources we find thought provoking, clarifying and at times even inspirational:

Measuring the Social Performance of Firms through the Lens of the OECD Well-being Framework

Standards Australia (2022) Handbook: Measuring and valuing social impact – Guidance on approach and methodologies (Unfortunately we can’t share our copy as individual licences need to be purchased) This is a consistent resource for the whole course.

3 Policies with Good Intentions and Tragic Consequences

WEALL – A Wellbeing Economy is Possible

Capitalism after the crises - Jim Chalmers

Module 1 FAQs

Q: Picking a Project - Does my project have to be something I am working on at the moment? Will I need to collect data to complete the course?

A:the project does not have to be something you are actually conducting, just something you have sufficient information about to be able to use it as the focus of the exercises throughout the course. 

Data collection is not required. In fact we don't expect anyone to collect data within the timeframe and we will provide examples to help practice the skills of extracting meaningful insights. 


Q: ‘Social Impact’ definition
- Why does the definition extend to include systematic or enduring change?

A: There are two (related) reasons for including the reference to systemic or enduring change:

  • If the change in lived experience was fleeting would we say there had been social impact?  If I give a child an ice-cream and it makes them happy for 5 minutes would we say there had been social impact?   Social impact needs to be about some underlying and enduring shift in lived experience that has the potential to impact wellbeing.

  • This is also the reason we usually measure social impact - to find out if an intervention is working - and most interventions are usually aimed at making some enduring impact otherwise why bother and why bother measuring it.  When people say they want to make a difference, don’t they mean an enduring difference, not some ‘flash in a pan’?

If you have any questions or thoughts that will be relevant to all those on their accreditation journey please ask away and we will post a Huber Social Academy response below.