The Power of Value Proven by Numbers: Why “Impact Measurement” Has Become Important

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 Korean social impact organizations pursue both “social value” and “profit” at the same time. In other words, they create social value through business methods. Because of this, many social impact organizations in Korea were often positively recognized simply for having “good intentions.” In particular, activities such as creating jobs for vulnerable groups or solving community problems were considered meaningful in themselves.

 

However, as the social impact ecosystem gradually expanded, it became increasingly difficult to fully explain the role and achievements of organizations through “good intentions” alone. Especially during the previous administration, as greater emphasis was placed on the self-reliance and sustainability of the social and solidarity economy and social innovation organizations, this atmosphere spread even further.

 

Around 2022, the importance of impact measurement — proving “what changed and how” — began to receive serious attention. Korean social impact organizations are now entering an era in which they must explain and prove the changes they create through numbers, and this has become an important language for communicating with stakeholders.

 

Explanation of the Social Value Index (SVI)(Source: Korea Social Enterprise Promotion Agency)

Why Impact Measurement Became Important🍒

 

As mentioned several times in previous articles, Korea’s social impact ecosystem has long grown around government policy. In this process, many social impact organizations rapidly expanded through government subsidies, public policy projects, and government-funded support programs.

 

However, as the direction of government policy changed, a new question began to emerge.

 

“How much did public funding actually solve social problems?”

 

Along with this question, a stronger emphasis developed around measuring and proving impact. In other words, because the ecosystem itself had grown based on government policy, changes in policy direction naturally increased the importance of impact measurement.

 

At the same time, “qualitative growth” also became an important issue.

 

After laws such as the Social Enterprise Promotion Act and the Framework Act on Cooperatives were enacted, the number of social impact organizations in Korea increased rapidly. However, many organizations struggled with management difficulties or unstable revenue structures, making it difficult to secure sustainability. In many cases, they also struggled to clearly explain their social impact.

 

As a result, attention shifted away from simple quantitative growth toward demonstrating what kinds of actual social changes organizations were creating.

 

Representative Social Impact Measurement Systems in Korea🌽

 

Two representative social impact measurement systems in Korea are the Social Value Index (SVI) and the Social Progress Credit (SPC).

 

Social Value Index (SVI)

 

The Social Value Index (SVI) is operated by the Korea Social Enterprise Promotion Agency and was developed to measure and evaluate the social value created by social impact organizations.

 

The evaluation focuses on three major areas

👉Social performance

👉Economic performance

👉Innovation performance

 

Using 14 detailed indicators, organizations are evaluated and classified into several grades such as excellent, outstanding, average, or insufficient. These results are later connected to various government support programs and resource allocation systems.

 

Social Progress Credit (SPC)

 

Social Progress Credit (SPC) is a program operated by the Center for Social Value Enhancement Studies (CSES). It measures the social value created by social enterprises in monetary terms and provides incentives based on the results.

 

In other words, the system aims to systematically measure and reward social impact, encouraging further investment and attracting talented people into the sector.

 

Since its launch in 2015, 468 organizations have participated in SPC over the past 10 years. According to CSES, the program generated approximately KRW 536.4 billion in social value and provided KRW 76.9 billion in incentives.(Source: CSES)

 

But Some Values Cannot Be Measured by Numbers🌿

 

This issue was also actively discussed in a social economy learning community that I introduced in a previous article. Practitioners in the field often say.

 

“The social value we create cannot be fully explained through numbers.”

 

For example:

👉Community recovery

👉Relationship building

👉Psychological stability

👉Trust building

 

are all important forms of social value, but they are difficult to quantify.

 

During those discussions, participants also shared concerns such as.

 

“Not every social value can be expressed numerically.” “Our work should not become focused on producing numbers rather than creating real change.”

 

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Nevertheless, Korea Is Strengthening Impact Measurement🍀

 

Despite these concerns, Korea is likely to strengthen social impact measurement even further in the future.

 

This is because trends such as.

 

👉The expansion of ESG management

👉Greater emphasis on public budget efficiency

 

continue to grow stronger.

 

In particular, with the recent development of AI technologies, new attempts are emerging to analyze and measure social value more precisely.

 

Conclusion🍓

 

Korea’s social impact ecosystem appears to be moving from a stage centered on “good intentions” toward a stage where social change must be explained and proven.

 

Of course, there are still many values that cannot be fully measured through numbers. Some important social changes remain difficult to capture through existing measurement tools.

 

Nevertheless, Korea’s social impact sector is currently searching for a balance between numbers and values.

 

<Read related articles>

 Measuring Social Value in Korea’s Social Economy (Part 1)

Measuring Social Value in Korea’s Social Economy (Part 2)

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