Social enterprise Q&A: towards ‘total impact’
Transport social enterprise HCT Group has more than a decade’s experience in measuring social impact. Tracey Vickers and Frank Villeneuve-Smith explain how impact measurement has helped them move from the ‘Robin Hood’ model of social enterprise to a new ‘total impact’ approach.
Q: Why is measuring and sharing social impact important to HCT Group?
Tracey: There are four reasons. The first is that we have a moral imperative to prove that we do what we say we do. The second is to celebrate it. The third is it helps us better understand our business – if we can understand why Bristol community buses might be having more impact than London community buses, we can use that. And four, it’s a key part of the social enterprise business model and, increasingly, we are being asked to demonstrate it. People want it – be that users, stakeholders, or commissioners and councils as part of the tendering process.
Impact is pivotal to our financing. In 2014 and 2018 we negotiated social investment deals where if we meet our impact targets we get a discount on our repayment rate. If we don’t meet our targets, we don’t get that discount, so it creates an incentive.
Q: Can you explain HCT Group’s concept of ‘total impact’ and how it influences your work?
Frank: It’s based on the commercial mechanics of the bus industry, the bus industry’s low margins. We’re essentially a set of community transport micro-enterprises with a larger bus operator attached to meet our overheads, so it takes a lot to subsidise the social side of it. Just a pure ‘Robin Hood’ model – where mainstream commercial bus services subsidise community bus services – can be problematic. We can’t cancel services if we have a tough year. So we wanted to move beyond this model, which felt insufficient, and look at how things we already do create to additional impact.
There are many things you can do if you just think about what you were doing anyway in an impactful way. We run transport for children with special educational needs, but what if that’s actually disempowering them? They’re only entitled to statutory transport until they are 16, but how are they going to get to college or a job afterwards? So out of that our Travel Training idea was born, where we help young people learn to travel independently on public transport in three local authority areas, funded through a Social Impact Bond.
Q: How do qualitative and quantitative data complement each other in your impact measurement?
Tracey: It depends on your audience. Some of our audience value quantitative data, some want the human story. They are complementary approaches. Our case studies are absolutely grounded in the numbers, they are our service users, and we identify them by looking at the data and asking our local teams which service users can demonstrate X, Y and Z.
When we took our first round of social investment in 2014, it was Bridges Fund Management who said if that we were going to get this money, we would need to be able to clearly demonstrate the outcomes we were having. That helped us build our impact scorecard, the set of outputs and outcomes we measure to demonstrate our impact.
Q: What has been the biggest challenge in impact measurement for HCT Group?
Tracey: Keeping it simple and small. We can risk counting too much and not being able to sort the wheat from the chaff. We used to try to look at 25 outcomes but have now simplified it.
We’ve grown and have 18 subsidiaries now. Each has a different culture and used to count things in a slightly different way, so there’s been a lot of work around education and getting people excited about doing this. It’s about bringing people together behind a common goal and taking the time to talk to people actually delivering the impact.
“You don’t have to start with the most sophisticated impact reporting, you just have to start”
Q: What advice would you give other charities beginning their own impact measurement journey?
Tracey: Start small, keep it simple and don’t try to future-proof because otherwise you can end up counting too many things.
Best practice says to use what you are already counting. If you’re counting trips, carry on counting trips – use what you can use to understand and improve your business.
Frank: Measure what you’re curious about: did it make a difference? Measure what you care about as an organisation as it relates to your values.
The quality of the data going into our impact reports has massively improved since our first baby steps nearly 10 years ago. You don’t have to start with the most sophisticated reporting, you just have to start.
Tracey Vickers is Head of the CEO’s Office and holds responsibility for social impact. Frank Villeneuve-Smith is communications director. Read HCT Group’s social impact reports here.