Outcomes funding, Homelessness, policy, Social Impact Bonds, Social Impact Investments
Victoria's first social impact bond: Journey to Social Inclusion
Sacred Heart Mission successfully negotiated Victoria’s first Social Impact Investment (outcomes-based contract) and Latitude Network supported them each step of the way.
SHM began life with the opening of the parish doors in Grey Street, St Kilda, to host meals for locals experiencing homelessness.
Nearly 40 years on and SHM is now a leader in providing intensive support for people right across the homelessness spectrum using engagement services (meals and welcoming physical spaces) and individualised service support as well as providing accommodation and support.
SHM’s program, Journey to Social Inclusion (J2SI), was born in the late-2000s out of the organisation’s concern that ‘business as usual’ was not allowing them to do the job they wanted to do - end homelessness for some of Melbourne’s most vulnerable people. As a result of the inherent silos in the social and health service systems, SHM decided to invest in building an evidence-based, outcomes-focused program for clients linking a ‘rapid-housing’ response with targeted help over the long-term (three years) - something the current service system found almost impossible to do.
After raising funds to run J2SI as a pilot as well as an expanded phase 2, SHM’s challenge was to continue to attract funding to both keep the program going but also to grow the program so that SHM could reach more of those it knew needed more targeted support.
In late 2016 the Victorian Department of Treasury and Finance issued a ‘Request for Proposal’ for its Social Impact Bond (SIB) Pilot Program. SHM saw this as an opportunity to both continue the growth and reach of J2SI while also testing an ‘outcomes-based funding’ approach for J2SI.
But this was going to be a competitive tender with perhaps up to 20 organisations interested in applying. How do we make SHM’s J2SI program stand out and then, if successful, negotiate something that had no precedent in Victoria?
THE ROLE LATITUDE NETWORK PLAYED / THE OUTCOME
Latitude Network acted as a specialist advisor, project manager and negotiator through both the tender application and contract negotiation stages. Russ Wood helped coordinate the existing expertise, talent and energy within SHM and the J2SI program, translating that into a negotiating approach that would help meet the Government’s outcomes, policy and financial agenda while also getting SHM the best outcome.
It was intense work - fortnightly negotiation meetings with Government (led by Treasury officials) meant weekly SHM team meetings to review the meeting agenda and do the work to prepare to negotiate and, importantly, problem-solve the many challenges.
Latitude Network not only helped keep the process on track - but also provided timely advice on the political and policy environment as well as the emerging outcomes-based funding environment.
THE TRANSFORMATION / IMPACT
J2SI became Victoria’s first ever SIB to be agreed when Victoria's Minister for Housing signed the contract with SHM in December 2017.
As a result of this, SHM is now able to provide intensive, tailored support over three years to 180 individuals experiencing chronic homelessness. Keep in touch to hear further updates as the project progresses.
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.
The South Australian Government opened its second round of Social Impact Investments, with a focus on better outcomes for children and young people in out-of-home care, and after leaving guardianship. This follows South Australia's first social impact investment in the Aspire homelessness program delivered by The Hutt St Centre.
Interestingly, the Commonwealth Government is providing $5m as partner with the South Australian Treasury Department, as an early foray into learning and engaging in the social impact investment space.
Latitude Network is assisting with the preparation and development of an application focusing on improved outcomes from the residential care context.
New South Wales
The NSW Office of Social Impact Investment (OSII) is reviewing proposals from three organisations focusing on Indigenous employment and empowerment. Latitude Network was been supporting one Indigenous organisation through the 'co-development phase' where OSII collaborated with the social organisation to advise and develop a proposal together. The intent is to support organisations to prepare robust proposals that are more likely to meet Treasury's requirements and be successful through what can sometimes be an arduous 'Joint Development Phase' of financial and contract negotiations to conclude a social benefit (impact) bond legal agreement.
The Victorian Treasury is a long way through negotiations with two organisations in the 'Joint Development Phase' for its next round of social impact bond investments. This round focuses on primary and secondary school aged children who have become disengaged from school and have a variety of other complexities in their lives. Latitude Network is supporting Melbourne City Mission and the Hester Hornbrook Academy in the negotiations.
It is a common problem in local and state government that a new piece of infrastructure is commissioned, but it fails to make a lasting impact on the social and health needs of the community. Our client, Brimbank City Council in Melbourne's West, had identified a range of population health and social measures that are worse than the average for greater Melbourne, yet investments over the years had not closed those gaps. In addition, a sports and recreation centre in St Albans needed to be redeveloped. The insight was that this large infrastructure project could be developed in a way that addressed the health needs of the community.
The project involves engaging with organisations to co-locate on the site, but also to sign up to common agreements and collaborative approaches to addressing community needs. Specific social and health outcomes (including in early childhood development and physical activity and health) were agreed, and a management system put in place to ensure reporting and accountability of those goals.
The program has three pillars -
Council-led social innovation, and aligning council programs and activities around common social outcomes
A novel approach that attaches outcomes goals to an infrastructure project and to tenant contracts
Building a community collaboration using the principles of collective impact
The project is still in development, but is pointing to a better way to make buildings work for the community and become more active, measured parts of system change. We will update this page as progress is made and goals achieved.
Combining an infrastructure project and a collaborative project to address population-level challenges is a new an exciting direction for local government. Typically these processes are managed separately, and while a building may have some impact goals up front, they can easily be forgotten in the commercial pressure to deliver a project in a timely and cost-effective way.
Latitude's role is to help design the systems, governance and approach for the project, and to help Council navigate their way through the complexities of analysis, managing, resourcing and stakeholder management. We believe this higher standard of outcomes-based infrastructure points to a future of improved impact and effectiveness. If you would like to keep up to date with the project as in progresses, subscribe to our newsletter or get in touch.
How does a social or health service provider demonstrate to their funders that they can, with early intervention, achieve not only measurable improvements for the people they work with, but also long-term cost savings? And how does that organisation navigate the political and policy environment - convincing key parties, like Government, to contract to co-design and deliver a long-term, sustainable program focused on delivering real outcomes? Complex issues often fail to respond to traditional social service approaches, so many funders are looking for a new approach that incentivises outcomes.
This is the question that Sacred Heart Mission set out to answer recently as a way of scaling-up their successful ‘Journey to Social Inclusion’ program which supports people experiencing homelessness.
What does one of these ‘outcomes-focused’ agreements look like? What is the right approach to take - what are the key considerations? Who are the key parties? What are the pieces of the outcomes puzzle and how do we get them to fit?
Social impact bonds, as one method for governments to commission for outcomes, hold the promise of a new way of doing things that is more focused and uses financially accountability to drive improvements. Latitude’s approach is based on understanding the full ‘value’ of solutions. Outcomes-based commissioning is a team sport and so it is necessary to understand what each prospective party wants to achieve (what they value), what they can contribute and, therefore, how much risk (and return) should be ascribed to each party.
Once determining the most fundamental point - understanding the value you are bringing to your clients - our approach is to support your organisation to build a convincing case about the service and financial benefits of your services and solutions, and pitch that solution to key funders (governments, in particular).
The outcome With our support as key strategic and project manager, the Mission was successful in its application to join with the Victorian Government (Depts of Treasury & Finance and Health & Human Services) to negotiate one of Victoria’s first Social Impact Bonds in late 2017. These negotiations began in May 2017 and are ongoing. Sign up to our newsletter to stay in touch with the project as it progresses.
Russ Wood of Latitude Network has worked with the Mission throughout this process.