The NSW Government's Office for Social Impact Investment (OSII) has been busy. While they are about to close a tender round for a formal social impact investment based on homelessness, they have also kicked off an exciting new funding process called 'Social Impact Investment - Evolve' (SII Evolve). The SII Evolve process invites social organisations to propose an outcomes-based project based on any cohort and social policy area. This is a significant step forward for outcomes-based funding in Australia as it is, essentially, an open invitation for organisations to come forward with great ideas about how to address social disadvantage and lowers the barriers to apply.
This advance is important because it recognises that social organisations (and their clients) need to be the initiators of progress and innovation - and often are. But not every idea or initiative with promise can fit into either the narrow criteria of a large funding round nor the complexity of a formal social impact investment (think 'Social Impact Bonds').
This funding round is different because it simplifies the first step; by requiring only a 5 page submission, rather than the 30+ pages that are behind a social impact bond-type application that is typical of the Australian funding rounds so far. The OSII understands that the complexity of preparing an outcomes-based project proposal is higher than a standard tender and can therefore be a barrier for smaller social organisations (and even larger ones) to spend the time developing the proposal.
While we aren't, yet, at the stage where social organisations have strong incentives to invest in new, outcomes-focused service delivery, initiatives such as SII Evolve mark the start of what could become a structural change in our system which recognises and rewards social organisations tat invest in testing and building new models that actually work to shift disadvantage.
Latitude Network is supporting social organisations and communities to develop proposals for the 'Evolve' funding round in NSW as well as current social impact investment rounds in Victoria. In our experience, most social organisations are excited by the opportunity to build new or adapt existing systems free from the output-focused shackles which currently hold them and their staff back. We would encourage organisations to start working on suitable proposals now, whether for this round or future rounds of funding.
The proposals are due by 12 October 2018, so now is the time to develop an application.
Find out more from the Office of Social Impact Investment's announcement here.
As governments and service providers around the world learn from the early years of Social Impact Bonds, a wider outcomes-based contracting landscape is emerging. Originally published in Pro Bono News.
If there’s one thing most people in the social sector agree on, it’s that they want to “make a difference”. This underpins the desire to move from a focus on outputs (where we may not have evidence about whether we are making a difference), to a focus on outcomes that matter to the social service user.
Not-for-profit boards are starting to drive an outcomes focus because part of good governance is to know whether the organisation is doing something that works. An ideal social service system ensures all participants are aligned around improving outcomes for those who need it.
Yet, the social service system is still a long way from that goal.
There are plenty of pitfalls in this transition to outcomes: debates about what and how to measure; costs of data collection; worries about unintended consequences and cherry picking; and the political hurdles in shifting resources to prevention. Yet while difficult, these are technical problems that can be solved with good outcomes-based contract design and a collaborative, co-design approach with government.
We recently attended the ICS (Institute for Child Success) Pay for Success Conference in North Carolina – a conference to support outcomes-based learning with a focus on early childhood disadvantage. We heard from an early intervention project successfully preventing at-risk kids from requiring costly special education services at school. We heard of the shift of $100 million of social service spending to an outcomes basis in the state of Rhode Island. We learned about a project that prevents hospitalisations of high risk asthma patients through allergen removal in the home – saving lives and money. These are some of the dozens of projects in operation now that are based around outcomes.
The ‘artist formerly known as a Social Impact Bond’ is back. And with a new name.
The Victorian State Government has just announced its second formal round of outcomes-based funding opportunities. And, regardless of name – these are serious opportunities to co-design fully-funded investments into service interventions that really work to close gaps for cohorts of disadvantaged Victorians.
The Government’s Statement of Intent, issued Friday 29 June 2018, is critical reading. It indicates that the Department of Treasury & Finance wants proposals from those who work in the following policy areas:
Just as with the first round of opportunities that delivered two contracts – one through Sacred Heart Mission and the other through Anglicare/VincentCare, to be considered for this round you’ll need to be well prepared.
The key things you’ll need to cover in your application are listed here:
For the second year running, the Turnbull Government has provided funding for the growing ‘social impact investing’ market. Scott Morrison’s second and third budgets have now promised a total of $28.5 million over ten years for this emerging area of policy interest.
Here is the spending breakdown over the forward years of the budget:
As you can see, not all of the promised funding hits over the coming four years - $8.3 million is pushed into the ‘out years’ (aka the ‘Never Never’), while the bulk of the funding falls in the coming three financial years and for the trials themselves.
Social Impact Bonds (SIBs) are a powerful new tool to align the interests of social organisations, governments and investors around proven social impact. While this form of funding is still in its early stage, there are some principles that are emerging. It is clear that a SIB will not be appropriate for all social programs - the need for robust proof of impact attributed to the intervention, and the involvement of investors and multiple government departments makes SIBs complicated instruments.
We encourage social organisations to think about the future of outcomes-based funding for programs. With new SIB funding rounds opening up, social organisations are asking - do I have the right kind of program and support to be successful in applying for a SIB?
There are several key dimensions to consider before beginning your application for a SIB.
> A vision
What is it that you are trying to achieve and for whom? A SIB is a long, challenging process, so your senior management need to have a clear and unified vision of why you want to proceed. While this will help sustain you when the complexity is greatest it will also help you convince Government that your organisation – your intervention – is ready to be taken through this process.
> A clearly defined problem
SIBs allow you to create, fund, measure and adapt an existing or new service response to a specific health or social need and for a specific cohort of people. The organisation needs to be very clear about the target cohort for the program. Develop a view on why, where and how the existing sets of services are inadequate. Demonstrate (ideally with existing evidence) how your proposal will solve the problem. Ideally, you have an existing intervention that you wish to ‘scale’ through a SIB, although this is not essential.
Latitude Network was the advisor to Sacred Heart Mission in the negotiation for Victoria's first social impact bond announced in December 2017. The article below first appeared in Pro Bono News.
Sacred Heart Mission (SHM) will deliver the state’s first SIB with the Victorian government, expanding the welfare not for profit’s successful Journey To Social Inclusion Program (J2SI).The Victorian government allocated $1.2 million for a targeted program in March to end long-term homelessness following a pilot of J2SI, agreeing to contribute a third of the overall $3.69 million cost of the three year program.
A SIB is a partnership with government, the social services sector and investors to create positive change for communities and individuals and has been used worldwide to address complex social issues. SHM said unlike traditional SIB capital raising, a portion of the funds would be sought from philanthropy. SHM general manager of business, Catherine Harris told Pro Bono News that the SIB was “departing from the standard capital raising process”.