Evaluating the social and the enterprise

Evaluating the social and the enterprise

Social enterprises have goals for the creation of social impact, and for generating financial sustainability through trade. While this balance between the social and the enterprise may seem clear and present in the daily operations and governance decisions of a social enterprise, it sometimes falls away when it comes to evaluation.

It can be tempting to focus attention on the social outcomes achieved, and to see financial reporting as an entirely separate activity that stands on its own – but this is a missed opportunity for deeper learning and knowledge-building.

Bringing together information about both the social and financial performance of a social enterprise can provide valuable insights about where and how resources are being used within the business to support particular social outcomes. Seeing where additional costs (such as increased wages due to more hours of employment for staff) might be contributing to business benefits (such as increased sales), or social benefits (like improved living standards and wellbeing), can help a social enterprise to learn more about how their business and social decision-making are aligned, or where there might be any areas of mismatch.

Understanding social and business performance together can also enable social enterprises to look at what it costs to support the achievement of particular social outcomes, and build evidence of how these costs and benefits compare to other types of services or programs. This kind of information can help decision-makers understand the unique benefits that social enterprises might provide.

In summary, it’s important to put the social and the enterprise together if we want to evaluate a social enterprise.

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