Whereas the Socioeconomic impact Statement is analogous to an income statement, the Socioeconomic Resource Statement is analogous to a balance sheet, but it too combines the social and the economic. The balance sheet examines the equilibrium between an organization's assets, liabilities, and equity. The basic equation is assets minus liabilities equals equity.
Although the balance sheet, like other conventional accounting statements, tends not to include social information, attempts have been made to do this. One of the earliest ideas for a combined social and economic balance sheet came from Abt and Associates, Inc. (1974), who produced a Social and Financial Balance Sheet that analyzed assets and liabilities in relation to stakeholders such as staff, organization, stockholders, and the public. The Socioeconomic Resource Statement presented in this chapter is inspired by Abt's pioneering initiative but, as will be seen, moves this work in a somewhat different direction.
The Socioeconomic Resource Statement shows the resources and obligations of an organization at a certain point in time. It consists of the three main elements of a balance sheet, albeit renamed to fit the redefined context. These elements become resources (assets), obligations (liabilities), and net resources/obligations (equity-that is, assets less liabilities). It also differs from a balance sheet in that, in addition to reporting economic capital and obligations, it also reports an intangible asset known as intellectual capital.
Capital is a term associated with the creation of wealth-most commonly, tangible economic items such as financial and physical capital. More recently, it has been used with intangible items that are knowledge based and referred to as "intellectual capital".
Intellectual capital is an umbrella term that includes three different forms of knowledge-based capital-human, organizational, and relational ( Dzinkowski 1998). In this regard:
human capital consists of the know-how, capabilities, skills, and expertise of an organization's employees and volunteers;
organizational capital refers to items within the organization such as its culture, management philosophy, information systems, copyrights, and patents; and
relational capital refers to items outside of the organization, including client loyalty, distribution channels, perceptions due to brands, and relations with clients, suppliers, and the local community.
Although intellectual capital is used most often in relation to profit-oriented businesses, it is just as relevant to organizations in the social economy.
The impetus for much of the discussion around intellectual capital has come from the rise of the "knowledge economy" where employee know-how, skills, and innovative capabilities play a leading role in an organization's success and competitive advantage. It is estimated that as much as 50 to 90 percent of the value created by a profit-oriented business today comes from the management of intellectual capital, not physical and financial capital (Hope and Hope 1997). In other words, physical and financial capital only account for 10 to 50 percent of the value created by these organizations. In the social economy, similar percentages of unreported value can be found (see Chapter 7).
Building on insights from the intellectual capital literature (see, for instance, Dzinkowski 1998; Guthrie , Petty, and Johanson 2001; Roslender and Fincham 2001; Seetharaman , Soon, and Saravanan 2002), the Socioeconomic Resource Statement reports the resources the organization has available to create value in the future. This statement includes the items on the organization's balance sheet (economic and physical capital), as well as several new components-human capital, organizational capital, and relational capital. The obligations of the organization are subtracted from its total available resources, and the result is either a net resource position or a net obligations position for both intellectual and economic capital. These amounts are reported separately to give a fuller picture of the organization's resources and to indicate clearly from where they are derived.