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The OECD has been producing knowledge, policy advice and capacity-building activities on the social economy for over two decades. In recent years in particular, governments at all levels have increasingly developed policies that support the social economy in providing jobs, delivering social inclusion and well-being, and driving the green and digital transitions. Testament to this is the Recommendation on the Social and Solidarity Economy and Social Innovation that was adopted by the OECD Council at its Ministerial meeting of 2022. The Recommendation sets out the conditions needed for the social economy to flourish, pioneer new business models, provide essential services and contribute to fair green and digital transitions.
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Social impact measurement and management helps social economy entities to understand and demonstrate their contribution to society while providing valuable information to achieve their social mission. Impact evidence is also used to diversify sources of funding and financing, tap into public and private markets and communicate transparently with internal and external stakeholders. Social economy entities differentiate themselves from conventional businesses by focusing on three founding principles: they place people and purpose (social or environmental) over capital, they espouse participatory governance, and they reinvest profits (if any) to the benefit of members, users or society at large. These defining features bear important consequences and advantages for social impact measurement and management practice.
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Policy makers do not always recognise the full value created by the social economy, The social economy, also called in some countries the “solidarity economy” or “social and solidarity economy”, is composed of a set of organisations such as associations, cooperatives, mutual organisations, foundations and, more recently, social enterprises. In some cases, community-based, grassroots and spontaneous initiatives are part of the social economy, in addition to non-profit organisations, often dubbed the “solidarity economy”. For the sake of simplicity, this report refers exclusively to the social economy. since it is often not measured properly – or even measured at all. This is due in large part to the challenges faced by social economy entities This report refers to “entities”, “organisations”, “actors" and “members of the social economy” interchangeably to designate the organisational structures comprising the social economy. in implementing social impact measurement. The main obstacle remains quantifying and valuating intangible, non-market and perception-based outcomes, such as improvements in well-being, local cohesion or social inclusion, in a way that is both credible and comparable across geographies and sectors. Social economy entities also struggle to navigate the wide variety of frameworks and solutions that exist at the local, national and international levels, often shaped by the needs of funders (OECD, 2021[1]).
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At the beginning of each impact measurement cycle, the design phase is critical to ensure that the following data collection efforts will help respond to the social economy entity’s learning needs. This phase entails defining the change strategy, identifying learning needs, and setting impact targets. These three subsequent steps will help ensure that the measurement efforts are geared towards the implementation of the social mission and that they adequately promote stakeholder engagement.
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Central to any impact measurement cycle is the data collection and analysis phase, which in the case of the social economy will typically follow a multi-stakeholder, participatory approach. The structuring step often starts during the design phase, while data collection may partially overlap with the ongoing analysis. Social economy entities can choose among a wide range of solutions, from mainstream ones that are shared with other private sector actors to tailored ones that have explicitly been developed for them. When selecting a specific solution for data collection and/or analysis, each social economy entity should carefully consider the data and skill needs required, besides the impact areas being covered.
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The final stage of the measurement cycle features three main steps: consulting with stakeholders, creating a report using a template, and communicating the results internally and externally. Often sacrificed due to budget and skill limitations, this phase is central to understanding social change mechanisms, continuously improving operations and motivating people working on the frontlines.
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Social impact measurement needs to be integrated in a permanent management process to enable evidence-based decision making and organisational learning. Impact management involves repeated measurement and continuous monitoring to understand what works and integrating those lessons into organisational practices and policies. This chapter outlines six building blocks that structure an impact management system that is not only used for reporting to external stakeholders but also for feeding into strategic action and planning.
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Social impact measurement can accompany social economy entities in their quest to increase the effectiveness and long-term sustainability of their activities. Social economy entities can incorporate the evidence stemming from their measurement efforts and management processes in their operational and strategic decisions related to organisational growth, impact scaling and internationalisation. This chapter offers a set of guiding principles that can help social economy entities maximise their impact over time.
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