On 28 February, the Public Services (Social Value) Bill will go through its third and final reading in the British House of Lords. If no further changes are proposed, the bill will become law before summer 2012. This has potentially major ramifications for anyone who works with or commissions public services.

The bill is a short one. It obliges public sector bodies to consider not only the economic, but also the social and environmental impact of the services they commission. The bill also asks these bodies to think about how they might use the commissioning process to improve these social outcomes.

In essence, the Social Value Bill encourages commissioners to prioritise social outcomes over simple efficiency savings. This is a fairly radical change to the culture and focus of the UK commissioning process. The bill has the added benefit of making it easier for charities and social enterprises, which are already committed to social value, to win public service contracts and compete with private procurement giants.

From the perspective of SIAA’s membership, the bill’s passing into law will be a positive step towards making impact analysis a key feature of public service procurement. It will be an important tool in assessing the likely impact of government-commissioned services and interventions, and in helping those delivering public services to achieve their targets.

The bill’s brevity does call into question some of its more operational aspects. The mainstreaming of social value into the procurement process is to be welcomed, but how will the impact of services be assessed in practice? How rigorous will the required analysis be? And who will undertake these analyses – in-house evaluation and impact analysts within government commissioning teams, or independent consultants?

The bill is an important one and has been rightly welcomed by the British third sector. Yet what its implementation will look like remains unclear; and there is a risk that the social and environmental impact assessments required by the bill will lack substance. We look forward to seeing more details as the bill edges closer to law.

As a start, we’ve mapped SIAA’s 100 plus founding members to work out where they are based. What do you think?

View SIAA membership distribution in a full screen map

These were only some of the questions SIAA grappled with at the DAFNE (Donors and Foundations Networks in Europe) winter meeting in Paris this week. DAFNE is a network connecting 22 European donor and foundation associations, including the Association of Charitable Foundations in the UK, the Centre Francais des Fonds et Fondations, and the Russia Donors Forum for instance. This adds up to a total membership of over 6,000 European foundations. That is to say, it’s hard to get a more representative group of people from European foundations into one room.

At the moment, most DAFNE members are now facing challenges from national governments and the public about the role of foundations in public life; and they are increasingly looking to social impact to assess the value of their investments. For this reason they welcomed SIAA’s mission while asking some critical questions and expressing some concerns, notably around measuring soft outcomes and how to interpret results.

Fundamentally, the understanding in the room was that the issue of social impact is now on the table for foundations, and that this is an agenda that they must engage in. Yet with their often lengthy experience in allocating grants to address social issues, and in evaluation the successes and failures of their grant-making, foundations are arguably well placed to start grappling with the elusive concept of social impact. We look forward to continuing the conversation.

At SIAA’s launch, on a rainy day in Kings Cross, what the organisation would be and what it would aim to achieve was still a matter for debate. Will it be an industry support group? Will it set and enforce guidelines? Or will it be a resource centre for the charity and not-for-profit sectors?

In the current financial climate, companies with traditional business models are failing left, right and centre. This means people are willing to consider new ways of doing business simply to survive. With an audience willing to listen to something new , there has never been a better time for social impact analysis to take centre stage. Such an opportunity won’t come round again for a long time.

The SIAA launch consisted of a room full of social impact experts, third sector practitioners and funders trying to work out a road map for the organisation and for the sector. Possibly, we were preaching to the converted, particularly as it was assumed that charities and third sector organisations are SIAA’s target market. Yet there is an appetite for social impact analysis beyond the social sector.

SIAA must take the lead in persuading the private sector of the performance, efficiency and strategic gains to be had by placing social impact analysis at the heart an organisation’s working. The dream is for any organisation worth its salt to have a Social Impact Officer working alongside its Chief Executive and Chief Operating Officer. Social impact analysis cannot be viewed as a bolt-on option, a lonely item under AOB.

In order for SIAA to have the greatest effect is needs to stop preaching to the converted – that is, the third sector, which is already ahead of the game on social impact analysis – and work on influencing the private sector to adopt social impact metrics. The end result would be a greater social impact for all of us.

Other photos of the day are available here .

More video interviews with launch speakers and participants are online here.

London on 1 December saw the long-awaited launch of SIAA, the Social Impact Analysis Association. The challenge for social impact analysis, said Jeremy Nicholls, chief executive of the SROI Network and a SIAA trustee, summing up at the end of the conference, is that social impact just isn’t sexy. Social innovation, yes; social enterprise, yes; anything with ‘social’ in the name, yes – except social impact.

But this autumn there have been five or six events on this issue in London alone, and a handful of new reports published. With social impact bonds leading the way on payment by results, government is now interested. With all this interest, we might get to a point where a CEO of a non-profit might say, ‘you know, we really didn’t create much impact there. Next time we will need to do something different.’

SIAA has come a long way in a short time. Two and a half years ago, in May 2009, the idea of an association of non-profit analysts was first mooted at a conference on ‘Valuing impact’. ‘My name is Martin Brookes and I’m a non-profit analyst,’ said Martin Brookes, then CEO of New Philanthropy Capital (NPC). ‘Not many people can say that and not many would understand it.’ The idea of SIAA came partly through reflection on the differences between the for-profit and non-profit spheres. Economists, risk experts and analysts in the for-profit world have qualifications and a right to speak about their subjects and be listened to. But there is no similar professional standard for analysis in the non-profit sphere. In November 2011, Andreas Rickert of Phineo, the German equivalent of NPC, was able to say ‘I don’t feel alone any more’. And there is no need for him to: SIAA now has around 75 members.

SIAA is a bit like a shell; what’s inside the shell has still to emerge. ‘It is up to you (the members) to make this organization,’ said Rickert. ‘The knowledge is in the room,’ said Martin Brookes. SIAA must be a member-led organization, he stressed.

Finding out what the members want was really what the SIAA launch conference was all about. Like the ‘Valuing impact’ conference before it, this was a conference with a goal. Whereas in 2009 the goal was to assess the appetite for an association for non-profit analysts, in 2011 the goal was to set the agenda for the newly formed association.

‘What is SIAA’s purpose?’ was the first question for after-lunch table discussions among conference participants. The table I was on felt the need for some definitions, particularly of the term ‘analysis’. ‘Analysis’ suggests measuring, evaluating, something done at the end of a process. But several people stressed the need for SIAA to avoid being the ‘impact Taliban’, assuming that any and every organization must be measuring impact. Is there a real difference between ordinary evalution and impact measurement? Is this a real attempt to produce better, more in-depth data or is it a matter of repackaging? The adoption of the name SIAA suggests that everyone knows what it stands for – but this is clearly not so.

Sir Stuart Etherington, chief executive of the NCVO, the National Council for Voluntary Organizations, stressed the need for impact to be central to the work of non-profits, not a bolt-on after the event. Social impact can become part of the way to lead an organization and motivate people, he said. ‘We’re not here to measure impact; we’re here to create it.’ He wondered if in future large non-profits would all have chief impact officers, whose role would be to ensure that impact is considered at every stage of the process.

Not that he underestimated the importance of measuring, of knowing what impact you are achieving. Charity trustees should know what they are trying to do and how they will know whether they are doing it, said Sir Stuart. Knowing what impact you are having is a ‘primary building block’ of governance. Making a difference is also highly motivating to staff, and knowing where they are making too little difference is a key job for senior managers.

Demonstrating impact can also attract more resources to organizations. The original NPC model was that the provision of good-quality data would attract new rational philanthropists, but philanthropists are not necessarily driven by rational behaviour, said Sir Stuart. Homo civicus rather than homo economist makes decisions about giving. But a report published on 30 November called Money for Good II suggests that if non-profits and information providers can give donors, advisers and foundation grantmakers the information they want, where and how they want it, these groups will be willing to shift $15 billion in charitable dollars to higher-performing non-profits. So perhaps there is life in homo economist and rational decision-making yet.

What next for SIAA? An afternoon of brainstorming in small groups provided a rich menu of tasks for the organization. Some were clearly for the long term – for example, creating a web forum for sharing approaches, evaluation designs and even evaluations across different countries. Others seemed more readily attainable. Tris Lumley of NPC was confident that principles/guidelines to cover measuring, analysis, reporting and using analysis could be drafted within a year.

Some issues for SIAA: who will pay for all this analysis? Will funders see it as their responsibility to ensure non-profits have the funds they need to do it? How can the views of beneficiaries be taken into account when assessing social impact? Will SIAA be an organization for sharing tools and good practices or will social impact analysis eventually become a formal profession with formal qualifications?

One thing that is clearly needed is awareness raising about the benefits – and limitations – of social impact analysis. Unless people are excited about the idea of SIAA, nothing will happen.

Caroline Hartnell is editor of Alliance.