Outcomes framework, collective impact, local government, social impact
Australian first: $50m+ outcomes-based health & wellness hub in Brimbank, Melbourne
The municipality of Brimbank sits in Melbourne’s rapidly-growing west. It’s new health and wellness hub is located in St Albans, a suburb which has experienced deep social and health inequities for several decades.
St Albans sits at the heart of the disadvantage that runs through the region and, in Keilor Downs on the border of St Albans is the suburb’s leisure centre (SALC). While the SALC had a loyal band of users it was well-beyond its useful life with growing maintenance costs adding to the challenges of running a tired community facility in a way that generates great community outcomes.
Council wanted to go beyond a redevelopment and create a centre of regional leadership. The aim is not just to create a world-class facility (with pool, gym, community spaces) but also to ensure the infrastructure investment addresses some of the deep social and health challenges faced by people in the area.
But how can a building do this? Typically, an infrastructure project focuses on risk, speed and staying within budget. Time is money. Often the thinking about services, impacts and site usage are delayed until after the concrete is poured.
But Council wanted to make sure the development actually addressed some of the social and health inequities in the region as well as being an example of great community built-form.
THE ROLE LATITUDE NETWORK PLAYED / THE OUTCOME
Latitude Network designed and built an ‘Outcomes-Based Infrastructure’ process for Council that put a set of health and social outcomes at the heart of the development. This involved analysing social needs and patterns in the community, governance design, outcomes framework, collaboration and management structure and service design.
The process brought together the ‘community’ vision of the site with the ‘physical’ vision for the site to make sure that the investment worked harder to achieve targeted community outcomes.
In addition to helping guide the physical infrastructure decisions as part of the Project Control Group, Latitude Network advised Council on a tenancy tender process that attracted the right social service providers to join the projects as long-term tenants. The tenancy agreements even include provisions around setting and achieving outcomes - a first for a project of this type.
THE TRANSFORMATION / IMPACT
The project has proven that the money that governments and communities spend on infrastructure can be leveraged for higher social impact without delaying the build. Infrastructure dollars can create great spaces but also be accountable for positive changes in people’s lives.
More than simply a ‘hub’, the embedding of social and health outcomes into the infrastructure process has meant that alongside new world-class facilities there are also key tenants at the site who are coming together with a program logic to address long-running social and health challenges.
The development has also spawned a ‘collective impact’ project to build community momentum around addressing local social issues using the Hub. It has been set up as the ‘Impact Brimbank’ initiative with a diverse group of community members, and is building support in advance of the opening of the Hub.
This article was originally published in Pro Bono News.
Latitude Network recently took some clients with us on an ‘outcomes tour’ of the US to learn from organisations, funders and governments that are shifting to outcomes-based funding. This includes what the US calls “Pay For Success” projects, and we call Social Impact Bonds, as well as newer forms of outcomes contracting where a range of financial and non-financial incentives are provided for performance. Outcomes-based contracting is when a commissioner of services (usually a government but can include large philanthropy) agrees to fund a social service program where at least some of the funding is contingent upon the organisation achieving a target performance on clear, agreed outcomes metrics for service users.
Key lessons learned -
1) A shift to outcomes funding, while difficult, is a must
Our observation in Australia and in the US is that most people who work in the social sector (including government) want the work they do to lead to improvements in people’s lives. There is generally a strong desire in organisations - from the frontline to the Board - to work towards outcomes. The difficulty is that merely measuring outcomes or drawing up an outcomes framework, while necessary, is often far from sufficient to change behaviours and performance. Funding on the basis of inputs or outputs is a very blunt instrument with very low levels of data or feedback on what is working for long term, relevant outcomes.
Funding on the basis of outcomes, however, can provide the joint incentive to properly define, measure, track and deliver outcomes that matter to the service user. A range of different outcomes have been contracted, from reduction in recidivism, to early childhood development milestones to family reunification. Despite their challenges, everyone we met - from local and state governments such as Ventura County or LA County Department of Mental Health, to impact funders such as Maycomb Capital and First5 LA and service providers such as the Center for Employment Opportunities and Interface - everyone was focused on making the shift to outcomes-based funding.
2) Social Impact Bonds have been a useful tool to kick start the outcomes revolution, but will be only one of many tools for the next era in outcomes funding.
Our discussions with Emily Gustafsson-Wright and Izzy Bogild-Jones at the Brookings Institution highlighted how Social Impact Bonds have had powerful impacts on social sector performance, innovation and flexibility in service delivery, but there is little evidence that they bring a net additional amount of private sector funding into the social sector. This aligns with Latitude Network’s view that outcomes funding is best used to drive alignment of interests and flexibility for innovation between government, social sector and philanthropy, and should not be seen primarily as a tool for increasing private funding of social services.
3) Organisations that build outcomes-funded projects are transformed for the better - especially in managerial focus and performance capability.
All the organisations we spoke to had used the experience of an outcomes contract to drive important changes in capability and process within their organisations. One organisation, Center for Employment Opportunities (or CEO) in New York City, has built a sophisticated outcomes and performance management system that gives visibility to everyone, from the frontline to the Board, on how the organisation is tracking in delivering its mission. The organisation has a strong, singular focus on a cohort of high risk offenders leaving prison. It’s focus allows for a robust program logic and service methodology and it uses detailed performance reporting to achieve employment goals and reduce recidivism. Their data has helped them identify the most effective early responses (e.g. ensuring a client starts a job on the day they turn up), and helps frontline workers adjust their activities by getting regular, timely feedback and learning from high performers. CEO’s outcomes contracts with governments have helped provide the incentives to focus on outcomes.
4) A new ‘Outcomes Partnership’ approach between Government and providers can lead to better achievement of outcomes
Forward-thinking governments are entering into what we are calling ‘Outcomes Partnerships’ with social organisations to work together over time on defining and aligning around key outcomes that matter to services users. These partnerships allow for better targeted procurement procedures from government, adding additional incentives into contracts for achieving short and longer term outcomes, and ensuring transparency of data sharing that can shed light on areas of highest and lowest performance. They also provide a much higher degree of flexibility to both Government and service providers through ‘active contract management’ methods that allow for adjustment of performance goals as theory hits reality.
These partnerships are a part of the journey of various governments in the US to shift large parts of their funding base to be procured on the basis of outcomes rather than inputs or outputs.
Our visit to the Massachusetts Department of Transitional Assistance in Boston revealed a forward-thinking government department that is leading the internal systems and behaviour change required to procure on the basis of outcomes, increase quality and sharing of data and establish trust between government employees and leaders and the social organisations they fund.
Latitude Network and our clients see Outcomes Partnerships as the next important step for the social sector in Australia.
Latitude Network is excited to announce that we are supporting Sacred Heart Mission in negotiating one of Victoria’s first Social Impact Bonds (SIBs). Sacred Heart Mission was one of two organisations successful in applying to the Victorian Government to enter negotiations to conclude SIB contracts this year based on expanding its Journey to Social Inclusion program, which is setting a new benchmark for addressing long-term homelessness in Australia.
Social Impact Bonds are being explored by commissioning agencies around the world in an attempt to find more effective ways of funding social and health services. SIBs (also known as ‘Pay For Success’ or ‘Payment by Results’ contracts) are part of an emerging set of funding mechanisms which aim to pay for service outcomes instead of service outputs – something the Productivity Commission discussed in depth in its recent report into competition, contestability and informed user choice.
Russ Wood is leading this work for Latitude, and is acting as strategic adviser and project manager through the ‘Joint Development Phase’ of the SIB which is expected to run until the end of 2017.
If your organisation is interested in exploring which programs might be suitable for outcomes-based commissioning such as Social Impact Bonds, then let us know - we'd be happy to share our learning. Just email us.