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.
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 that invest in testing and building new models that are proven to 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:
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.
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.