Social impact measurement in Denmark: praxis of local social enterprises

Context Social entrepreneurship and the third sector at large have gained a considerable momentum over the past two decades. Stemming from private initiatives, this phenomenon found a positive echo in the public sphere... [ view full abstract ]

Context

Social entrepreneurship and the third sector at large have gained a considerable momentum over the past two decades. Stemming from private initiatives, this phenomenon found a positive echo in the public sphere through the political reforms enthused by new public management and their attempt to inject market-inspired mechanisms into public administration. Social enterprises are therefore progressively being recommended as a key lever for governments to focus on in the currently challenging economic context (European Commission and OECD 2015; Hulgård 2011).

This enthusiasm for social enterprises and the development of impact investing has also led to an increasing focus on impact measurement. This trend has first emerged among private actors, eager to prove and manage their impact. While the field of impact measurement has been accelerating in the past few years, a growing number of specialised organisations have emerged (e.g. B Lab, Social Asset Measurements or Sinzer), as well an ever-expanding list of methodologies for social impact measurement (Grieco 2015; Olsen and Galimidi 2008).

Public stakeholders have also picked up this infatuation for impact measurement (European Commission and OECD 2015), which happens to be a well-fitted feature for the performance-driven new public management frameworks. In this context, we observe an increasing number of attempts to make social impact measurement part of regulatory frameworks aiming to favour the third sector for the provision of social services (e.g. in 2014 the G8’s Social Impact Investment Taskforce or the European Commission’s Social Impact Measurement Sub-group).

Purpose

The public sphere appears to be progressively institutionalising impact measurement practices inspired from private social ventures, social investors or philanthropists. It does so by taking direct inspiration from the frameworks developed by private stakeholders, and few concerns seem to be given to the specificities of the public sector and public management in this process. This article thus proposes to explore the concrete use of impact measurement frameworks from the perspective of both the social enterprise mobilising them and the public actors they report their impact to.

This article focuses on a specific type of social enterprises: work integration social enterprises (WISEs). WISEs are social enterprises aiming at integrating unemployed people on the verge of permanent exclusion through work (Defourny and Nyssens 2010). By focusing on WISEs, this paper narrows its approach to social value by targeting enterprises having one specific aim: social integration through work.

Approach and novelty of the paper

This article summarises the first results of an empirical research carried out in Denmark, based on interviews of stakeholders involved in the development of the Danish social economy in the country. It also builds on the preliminary results of a statistical survey investigating the relationship Danish social enterprises have with social impact measurement. This paper stems from a larger research project comparing practices in France and Denmark.

The article first proposes an overview of the social enterprises ecosystem in Denmark, narrowing down on WISEs. It briefly summarises the history of social enterprises in the country and inventories the stakeholders involved in their development, focusing on public actors.

The results of the research are then presented, focusing primarily on (i) understanding how impact was measured by the two WISEs, (ii) what drove the decision to choose one impact measurement framework (and associated impact metrics) over another and (iii) how relationships with public actors have influenced that choice.

 The case’s analytical paradigm is critical realism (Archer et al. 2013). We use the stratified ontology (“layered realities”) of critical realism (Delorme 1999) to better understand the mechanisms leading to a choice of impact measurement methodologies and metrics in the context of the relationship between a WISE and its public interlocutors.

Summarised bibliography

Archer, Margaret, Roy Bhaskar, Andrew Collier, Tony Lawson, and Alan Norrie. 2013. Critical Realism: Essential Readings. Routledge.

Defourny, Jacques, and Marthe Nyssens. 2010. “Social Enterprise in Europe: At the Crossroads of Market, Public Policies and Third Sector.” Policy and Society 29 (3): 231–42.

Delorme, Robert. 1999. “Realism in Economics: Critical or Complex.” In . Citeseer.

European Commission, and OECD. 2015. “Policy Brief on Social Impact Measurement for Social Enterprises.” Publication Office of the European Union.

Grieco, Cecilia. 2015. Assessing Social Impact of Social Enterprises: Does One Size Really Fit All? Springer. http://link.springer.com/content/pdf/10.1007/978-3-319-15314-8.pdf.

Hulgård, Lars. 2011. “Social Economy and Social Enterprise: An Emerging Alternative to Mainstream Market Economy?” China Journal of Social Work 4 (3): 201–15.

Olsen, Sara, and Brett Galimidi. 2008. “Catalog of Approaches to Impact Measurement - Assessing Social Impact in Private Ventures.” The Rockfeller Foundation.

Yin, Robert K. 2009. Case Study Research: Design and Methods. Sage publications.