The recent Third Sector Reform in Italy focuses more on accountability and transparency of Third Sector organizations and social businesses. However, due to their intrinsic diversity both locally and nationally, it is difficult to identify a univocal model capable of reporting the responsibilities and social impact of all Third Sector entities. The Social Economy Unit of ARCO, together with DISEI (Department of Economics and Business of the University of Florence) and at the technical table of COPAS (Permanent Conference of Social Autonomies) of the Tuscany Region have developed a flexible model for the reporting of the social impact that they then experimented in 3 case studies.
The scientific path that led to the elaboration of the model and to the experimentation is explained by the ARCO Researchers in their latest article etitled “Reporting the social impact. Methodologies, indicators and three cases of experimentation in Tuscany ” published in the magazine Management Control. After reviewing the literature on the subject, Researchers explain the need to rethink non-financial reporting. The model proposed is therefore intended to be a first step towards the construction of a shared framework for social impact reporting.
How to report the social impact for the Third Sector?
The model developed by ARCO Researchers answers to a growing need to elaborate a strategy that allows social businesses and social organizations to report on social and environmental results to stakeholders and their local communities. In the article, therefore, authors propose a possible methodology for social impact reporting that is flexible, adaptable, accessible and easily communicable to Third Sector organizations that are very different from each other in terms of size, legal nature, activities, etc.
The elaborated and tested proposal is articulated in 3 key moments:
- ♦ Stakeholder engagement as a necessary step for the participative construction of a social reporting document made up of both qualitative and quantitative elements
- ♦ The qualitative reporting of the organization’s history, identity and activities
- ♦ The quantitative assessment of the change generated as social impact. In this phase the complexity concerns the monetary evaluation of the outcomes of the organizations that can be resolved with the measurement of the social return of the investment, also called SROI analysis.
The model therefore identifies the macro-areas and the dimensions on which the analysis of the social impact of institutions and organizations will develop. The tool can therefore be adapted to the needs of each organization or organization through a participatory process that puts stakeholder and beneficiary involvement first.