A Beginner’s Guide to Social Value: Understanding Key Concepts
Social value is an increasingly important concept in business, public procurement, and community development. It ensures that decisions made by organisations go beyond financial profit and contribute to wider social, economic, and environmental benefits.
Whether you are a business looking to win public contracts, a charity measuring impact, or an individual interested in sustainable and ethical decision-making, understanding social value and the frameworks used to measure it is essential.
What is Social Value?
At its core, social value refers to the positive impact that organisations create for people, communities, and the environment. It is about ensuring that investments, procurement decisions, and projects provide benefits beyond just cost savings or profit.
Examples of social value include:
Creating jobs for underrepresented groups
Reducing carbon emissions and adopting sustainable practices
Improving community well-being through local engagement
Supporting small businesses and social enterprises
Social value is increasingly being formalised in public procurement, meaning that organisations bidding for contracts must demonstrate how they will create additional benefits beyond the core goods or services they provide.
Framework for Social Value: What is the Social Value Model?
The Social Value Model is a framework introduced by the UK government to ensure that public procurement supports broader social, economic, and environmental benefits. It includes five key themes that bidders must address when applying for public sector contracts:
1️⃣ COVID-19 Recovery – Helping communities and businesses recover.
2️⃣ Tackling Economic Inequality – Creating jobs, skills, and opportunities.
3️⃣ Fighting Climate Change – Reducing environmental impact.
4️⃣ Equal Opportunity – Addressing workforce inequalities.
5️⃣ Well-being – Supporting health, resilience, and community cohesion.
This model is embedded in procurement processes, ensuring that suppliers integrate social value into their proposals.
What is MAC (Model Award Criteria)?
Model Award Criteria (MAC) is a framework within the Social Value Model that defines how social value will be assessed in procurement.
Before the Procurement Act 2023, UK contracts were evaluated primarily on MEAT (Most Economically Advantageous Tender), which focused on cost and value for money.
Under MAC, bidders are assessed on how their proposals:
📌 Deliver social value contributions
📌 Promote environmental sustainability
📌 Encourage supplier diversity and inclusion
📌 Support innovation and workforce development
This ensures that contracts are awarded based on social impact, not just price.
Framework for Social Value: What is the Theory of Change?
The Theory of Change (ToC) is a strategic framework used to plan, measure, and evaluate social impact. It breaks down how activities lead to long-term change by identifying:
Inputs – Resources invested (e.g., funding, training).
Activities – Actions taken (e.g., community engagement, job creation).
Outputs – Direct results (e.g., number of people trained).
Outcomes – Medium-term effects (e.g., increased employment rates).
Impact – Long-term societal change (e.g., reduced poverty).
Organisations use the Theory of Change to clearly define their social value goals and measure progress effectively.
Quantifying Social Value: What is SROI (Social Return on Investment)?
SROI (Social Return on Investment) is a method for quantifying social value in monetary terms. It compares the benefits of a project against its costs to determine how much social value is created for every £1 invested. It uses the Theory of Change as the basis of its calculations.
For example:
🔹 A job training programme costs £100,000 but generates £500,000 in social benefits (e.g., increased earnings, reduced welfare costs).
🔹 The SROI ratio would be 5:1—meaning that for every £1 spent, £5 of social value is created.
SROI helps organisations:
✅ Demonstrate impact to funders and stakeholders
✅ Justify investment in social projects
✅ Compare different initiatives to determine the most effective approach
Proxies for Social Value: What is HACT?
HACT (Housing Associations’ Charitable Trust) is a leading social value organisation in the housing sector. It developed the UK Social Value Bank, which provides financial values for different social outcomes—such as improved well-being, employment, and community engagement.
Housing associations, local councils, and businesses use HACT’s tools to:
Measure the impact of housing projects
Quantify well-being improvements
Provide evidence for funding applications
HACT’s approach allows organisations to evaluate their social impact with robust, data-driven financial values.
Proxies for Social Value: What are TOMs (Themes, Outcomes, and Measures)?
TOMs (Themes, Outcomes, and Measures) is a widely used social value measurement framework developed by the Social Value Portal. It provides a structured approach to tracking and quantifying social value.
TOMs framework includes:
✔ Themes – Broad areas of impact (e.g., jobs, community, environment).
✔ Outcomes – The specific changes desired (e.g., reducing unemployment).
✔ Measures – How outcomes are tracked (e.g., number of jobs created).
The TOMs framework helps organisations:
📊 Measure and report on social value consistently
🏆 Compare social value impact across projects
🔍 Align with government and procurement standards
Best Practice: What is Social Value International?
Social Value International (SVI) is a global network that promotes best practices in measuring and managing social impact. It provides:
Guidelines for social value reporting
Training and certification for professionals
A global community for sharing best practices
SVI plays a key role in setting international standards for social value measurement.
What is the Social Value Portal?
Social Value Portal is a leading platform for measuring, managing, and reporting social value. It provides:
A digital tool for tracking social value contributions
The National TOMs framework for standardised measurements
Support for businesses and public sector organisations
Many organisations use Social Value Portal to embed social value into procurement and corporate responsibility strategies.
Summary
Social value is no longer a ‘nice to have’—it is now a key factor in business, procurement, and community investment. Understanding frameworks like the Social Value Model, TOMs, MAC, and SROI ensures that organisations can effectively measure and communicate their impact.
✔ Social value creates meaningful benefits beyond financial profit.
✔ The Social Value Model integrates social value into public procurement.
✔ The Theory of Change provides a structured way to plan impact.
✔ SROI quantifies the financial return of social initiatives.
✔ HACT specialises in social value measurement for housing.
✔ MAC ensures procurement decisions prioritise social impact.
✔ TOMs standardises measurement and reporting.
✔ Social Value International sets global best practices.
✔ Social Value Portal provides tools and frameworks for organisations.
By embedding social value into your strategy, you can drive positive change and unlock new opportunities.
Would you like to explore how to measure social value for your organisation? Let’s discuss!
