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How cost effective are social ventures?

December 2019: Unemployment had fallen to its lowest level since 1975.  The gap in the employment rate between disabled and non-disabled people in the UK was at 28.1 per cent. At the same time, UnLtd and NEF Consulting were looking at this issue as part of a new study into the impact of social entrepreneurs. The report is now being published as the findings are needed now even more than they were in 2019. 

Many people have lost their jobs during the pandemic, but disproportionate numbers of disabled people have experienced this reality first-hand. The disability employment gap has increased to 28.8 per cent, following a period last year when average redundancy rates for disabled people were 6.9 points higher than they were for the overall population. There are many reasons for this – including disability discrimination, inaccessible workplaces and a lack of support once in work.  

Disabled people may understandably fear that they will bear the brunt of the 500,000 extra job losses forecast this year

The Social Cost Benefit Analysis (SCBA) study looks at five social ventures, all of whom respond to the disability employment gap in different ways.  

We worked with the ventures to map the stakeholders that benefitted from their work, and to highlight the outcomes of their services or interventions. This was used to develop data collection tools, which in turn fed into the SCBA modelling.

The modelling looked at the changes that were experienced by their clients, adjusted for the change that would have happened anyway, or was caused by factors other than the social venture itself, and then monetised the resulting social value using established financial proxies. 

We found that social entrepreneurial solutions create significant social and economic value.

The study showed that the five social ventures generated a total of £19.8 million in social (£18.35 million) and economic value (£1.45 million) in a single year. There were also indications that beneficiaries were enjoying gains that would make them more likely to stay in the opportunities they were securing.  This is likely to lead to further social value in the medium to long-term, not captured in the figures above. The study recorded evidence of gains in: 

  • Confidence (increases between 31 and 49 percentage points).
  • Feeling of usefulness (increases between 26 and 53 percentage points).  
  • Emotional Wellbeing (increases between 15 and 52 percentage points). 

But, how does the social and economic value compare to the cost of the social ventures’ work? The social ventures achieved a cost-benefit ratio in all cases, ranging from 1.8:1 to 116:1.  

It’s evident that social entrepreneurs can deliver good value for tax-payers’ money, if the Government chooses to invest in them. 

The forthcoming publication of a National Strategy for Disabled People will be an opportunity for the Government to harness social entrepreneurs in closing the disability employment gap. As the country comes out of a pandemic, this new evidence shows that the Government should grasp the positive social and economic returns that social entrepreneurs can bring.

A version of this blog was first published by UnLtd.

Read a summary of the report here.

Download the full report here.

Visit the UnLtd website for the full blog and more information.

Photo by Marcus Aurelius from Pexels