why social accounting encourages us to delude ourselves...

I've been thinking a lot about approaches and issues relating to social accounting/impact reporting lately – perhaps because it’s about that time of year when I publish my own latest annual report! (and to my knowledge, am still the only freelance consultant on the planet to do so...)

A regional enterprise support agency asked me in conversation recently about one of the measures I report on in my framework: the percentage of my turnover that I directly reinvest in my own CPD – they wondered why I'd measure that, rather than simply keep a log of all my CPD activity (which I also do!). And I think my answer surprised them: it’s so I know how well I'm actually doing in respect of CPD - keeping a log of activity only helps me understand what works for me, it doesn’t allow me to compare how I'm structuring what I do in relation to my counterparts – and in regard to CPD, there are benchmarks from bodies such as the CIPD who I can look at to consider if I’m investing more/less than the market norm.

Without being able to compare the findings of our social impact reports, how confident can we be in what we think they tell us about ourselves? I can create measures and standards that will generate what seem to be impressive figures and statistics, but they're only really impressive if I can compare them against other peoples'...

And that’s where most of the approaches to reporting social value/impact/accounting come unstuck – while there may be standardisations of overarching methodologies, the way they're enacted can vary incredibly between organisations who adopt them: I know of one instance where 2 homeless charities compared their impact by both using Social Return on Investment (SROI) – one seemed to be clearly outpacing the other in terms of the final calculated financial ratio, but in comparing their ‘workings out’ it became clear that this was because they'd not been consistent, with one counting far more stakeholders and outcomes than the other had...

Unless we use measures in our social impact reporting that have a consistent applied methodology and can generate data which we can directly compare against others' in the confidence that they've measured it in exactly the same way – any social impact report we create falls short of its true potential in helping us to decide how well we really are doing in the world beyond the inside of our own heads, and as such lacks credibility with others (such as commissioners, investors, etc...)