Article first published on Pro Bono News 22 September 2021.
With the move to reporting on outcomes gaining pace, Dale Renner, director of Latitude Network, shares advice on what social organisations can do to build an outcomes-focused organisation.
Have you noticed that more and more philanthropic and government funders are asking for proposals to have an “outcomes focus”? Impact investors and service commissioners increasingly want evidence that a program makes a difference.
The move to report on “outcomes” is gathering momentum and for good reason. The purpose of social sector funding, whether in homelessness, mental health or child protection, is to improve the lives of people – to make a difference. That’s also the mission of every social sector organisation.
An outcome is a way of defining and measuring this important “difference” made in someone’s life – between dropping out of school and finishing school, between being employed or not employed, between mental distress and a sense of wellbeing. By defining and measuring the right outcomes, organisations and funders can focus efforts on what matters most to the service recipient, and therefore make the most social impact.
Funders have been experimenting with different ways to fund for outcomes, particularly over the last decade. A complex form of outcomes funding is a social impact bond (SIB), where a third-party provides an upfront investment to cover program costs in advance of the outcomes being known and outcome payments being made by the program funder (usually government). In Australia four states have funded more than $100 million across a dozen SIBs so far. We are seeing more government interest at federal and state levels in funding programs on an outcomes basis. Even if your funder is yet to raise this with you, the pressure is on to demonstrate outcomes per dollar spent, and to compare this to other programs or organisations.
Every social organisation we talk to is somewhere on the outcomes and data journey – sometimes one program has lots of good data but isn’t using it for decision making, and another area hasn’t yet decided what data to collect. Many organisations have invested in client databases (CRMs/CMSs) to deliver data that government (or external stakeholders) want, but haven’t thought through what is the right data to collect that will aid continuous improvement and demonstrate impact.
Latitude Network believes that we are on the verge of a data-driven performance jump in the social sector. The manufacturing world went through a data and performance revolution when Toyota adopted the ideas of American Engineer William Deming in the early 20th century. More recently the worlds of marketing and software have used analysis of “big data” to continually improve services and to better tailor services to individual needs. Just as the key to those leaps in quality and effectiveness in the commercial world was access to better and more precise data, we are now seeing tools emerge to enable impact improvements in the social sector.
Journey to ‘outcomes-focus’ Being an “outcomes-focused” organisation goes beyond simply defining some outcomes and commissioning program evaluations. While program evaluations can be important tools to prove point in time impact (especially if you have a counterfactual or control group to test against), other tools are needed for the modern fast-paced challenges of data-driven organisations. One state treasury official we talked to recently stated that they would much prefer to see social organisations investing in their own data capability and generating ongoing insights than in static program evaluations.
Using data and focusing on outcomes are important not only to ensure an organisation is delivering its mission and continually improving its effectiveness, but also to be competitive when it comes to philanthropic and future government funding. The business case is heart and head, mission and financial.
So what can social organisations do to build an outcomes-focused organisation:
Once you’ve got data, the next phase is to use the data well – easier said than done. This means collating data, building dashboards, visualising the right data, and testing and refining it. And if you have great data with good “before” and “after” measures of outcomes, it might be time for some really exciting analysis – using artificial intelligence tools (machine learning) to identify segments and build predictive models that help you improve impact and become more efficient. But perhaps that’s a discussion for another time.
Reinventing homelessness prevention
In an effort to deliver better outcomes and prevent homelessness in South Australia, the South Australian government has run a competitive tender of homelessness services in the state under a new structure. It sought responses from alliances of social service organisations to work together to address problems in the homelessness system under a single funding contract for an entire region covering all homeless cohorts. The previous system for the Adelaide City and South region was a series of separate funding agreements across 15 different agencies without a common outcomes framework or formal methods to interconnect between services.
Latitude Network supported the Toward Home Alliance to develop a ground up homelessness strategy and program logic based on prevention. With the team, we identified the wide range of cohorts with differing needs across the homelessness system. We zeroed in on those at risk of entering the homelessness system and identified a way to capture data and shift resources towards preventing entry into the crisis accommodation system.
The alliance partners developed a professional and mature way of collaborating which provided a strong platform for development of a more ambitious program design. This represents one of the most significant changes to the homelessness system in some years, and provides a pathway for better collaboration, use of data, and continuous improvement with transparent sharing of outcomes between the social sector partners and government.
The new outcomes–oriented approach helps to align government and social service organisation interests more directly with client interests. The achievement of client outcomes and prevention of entry into high cost homelessness services provides benefits for all parties.
Congratulations to the alliance partners that will now deliver integrated, outcomes-based homelessness services for the Adelaide City and South region -
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This article was originally published in Pro Bono News on 4 May 2020.
In the social sector today, there is an understandable rush to manage immediate operations, protect staff, and review face-to-face service delivery. It’s a complex time and it is difficult to see beyond the next week or two. However, senior managers need to start thinking about the phases of adjustment to the COVID-19 crisis across time:
There are a number of significant forces at work:
Increased use of technology – In phase two, social distancing will continue to test the sector’s ability to deliver services in the traditional face-to-face mode. Back office functions will need to simplify but it is also a time to experiment with what parts of the service model can be delivered via technology and what parts require face-to-face interaction.
What does this mean for social organisation strategy? While most organisations have rightfully been focused on phase one adjustment, some of our clients are now entering phase two stabilisation period. We think it is now time to plan for “living with constraints” and for phase three, the “leverage the upswing” phase after social restrictions begin to ease. One way to think about it is that operational management should be focused on phase one, while CEOs and boards need to be planning for phases two and three.
While it is incredibly disruptive, Latitude Network believes that the current upheaval also provides an opportunity for social organisations to accelerate the innovations and performance improvements needed over the next few years. This is exactly what is happening now in manufacturing around the world – technology improvements that might have taken five years are being implemented in one year.
The high-performing social organisation
What does a high-performing social organisation look like? We will need social organisations that use data for evidence-based decision making and continual improvement, leverage technology, have a laser focus on their social impact and outcomes, and develop a “flexible playbook” of opportunities and programs that enable adaptability to changing needs and funding environments. An organisation that can evidence performance to government and other funders, and can also make a convincing case for the economic savings arising from their work.
The daily charting of COVID-19 cases and the entry of epidemiological models into the mainstream discourse have demonstrated how vital good data is at times of uncertainty. Social organisations need live, relevant data that enables them to pinpoint barriers to achieving impact, to identify service approaches that work best for specific cohorts and sub-cohorts and help allocate resources to where the organisation can have the best impact.
Social sector boards are tasked with ensuring organisations maximise their impact. They therefore need to be asking these questions to help with this transition:
As our way to contribute to social organisations in this time of uncertainty, Latitude Network is offering free “Sounding Board” online workshops for the boards and executives of five social sector organisations exploring the questions outlined above. If you are interested please contact us at email@example.com to book your workshop. We will provide a pre-reading document and a summary of recommendations after the workshop.
Should social organisations pursue growth, and if they do, how should they do it?, asks Dale Renner. (First published Pro Bono News 13 June 2017)
“Growth” can be a controversial word in the social sector. Social service leaders sometimes say “our job is eventually to go out of business”, implying that in some unspecified way, social problems will be solved and will remove demand for assistance. Yet, as the sector moves from grant-based to individualised funding, it becomes important to have a view on what growth means to social services organisations.
The ethical case for growth
Growth in this context doesn’t mean growing the amount of money spent on social programs in the aggregate. The focus is on growth at the program, or possibly organisation, level.
To understand the case for growth, agreement is first needed on what outcomes the community desires – many are obvious such as reducing crime, family violence, homelessness and Indigenous disadvantage. It is also important to understand what programs are proven to achieve that outcome for a certain cohort of people (noting there are levels of proof from anecdote through to randomised controlled trial). Growing the reach of those proven programs to benefit a greater number of people is surely an ethical pursuit as it reduces human suffering and harm. So at first blush, if a program is successful, for example, in helping to improve universal child literacy, it has a prima facie case for growth.