Defining Social and Socio-Economic Value

According to Jed Emerson, Jay Wachowicz, Suzi Chun with the Harvard Business School…
Social Value:  is created when resources, inputs, processes or policies are combined to generate improvements in the lives of individuals or society as a whole. It is in this arena that most nonprofits justify their existence, and unfortunately it is at this level that one has the most difficulty measuring the true value created. Examples of Social Value creation may include such “products” as cultural arts performances, the pleasure of enjoying a hike in the woods or the benefit of living in a more just society.

Social Value is about inclusion and access. Social Value can be found in anti-racism efforts, some aspects of community organizing, animal rights advocacy and folk art. It has intrinsic value, but can be difficult to agree upon or quantify.

Socio-Economic Value:  builds on the foundation of Economic Value creation by attempting to quantify and incorporate certain elements of social value. An entity creates Socio-Economic Value by making use of resources, inputs, or processes; increasing the value of these inputs, and by then generating cost savings for the public system or environment of which the entity is a part.

These cost savings are potentially realized in decreased public dollar expenditures and partially in increased revenues to the public sector, in the form of additional taxes. Examples of activities that generate Socio-Economic Value are supported employment programs for the disabled or homeless, job training programs or other initiatives that provide employment for those presently receiving public support and divert individuals away from public systems and toward private markets. Value creation in this arena can be measured using a social return on investment metric (SROI), social earnings calculations and other evolving metrics.

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