- February 9, 2015
I have been struck by an article in Civil Society news today (9th February 2015) about the NPC manifesto, A Vision for Change. There are two recommendations that rang a chord with me.
The first is that Trustees should be encouraged to focus more on how the charity pursues its mission and delivers beneficial outcomes rather than just on its survival. In our work over the last twelve months with more than a dozen charities and social enterprises, my colleagues and I have been surprised how often Trustees who can be extremely entrepreneurial in their business and personal lives, become suddenly risk averse when acting as a Trustee.
The main result of this risk averse approach, in my view, is a long tail of sub-scale charities in almost all sectors but notably in military services and health sectors. These all incur central overhead costs to run which could be saved, if the mission took precedence over survival, and Trustees considered mergers with other charities or more joint-working arrangements.
Most mergers in the charity sector appear to be emergency rescues when things have gone wrong rather than planned approaches with the aim of delivering more or better outcomes. It takes a brave board of Trustees to make a strategic call such as continuing a charity’s mission through recommending a merger. (As a Trustee myself with two charities, I admit I can see the challenge from the inside). Clearly, finding a merger partner is potentially costly and ATQ’s response to the Cabinet Office’s 2014 consultation on sustainability included a recommendation that some funds be set aside to support charities seeking pro-actively to merge or take over others.
The second recommendation from A Vision for Change which I fully support is for a £30m ring fenced innovation fund. The report argues that this should be a fixed proportion of BIG Lottery funds starting at 1% and rising to 5% over the next parliament. Since we began working on social investment feasibility studies back in 2011, ATQ arrived at a similar conclusion. If new public service innovative ideas are to be tested, then the monies need to be able to be ‘lost’ and so have to be set aside for that specific purpose and possibility. No civil servant wants his or her career affected by commissioning an innovation that somehow fails. Heaven forbid that they or their senior officers end up trying to explain how that could ever have happened to the Public Accounts Committee.
Many private organisations and indeed charities have equivalents to R&D budgets but somehow Government, despite all the challenges it faces, does not and this has surely hindered improvements in public services down the years.
- November 28, 2012
On November 23rd the Cabinet Office launched two initiatives designed to stimulate the market in social impact bonds (SIBs) and similar payment by results (PBR) schemes: the Centre for Social Impact Bonds (an online resource for those considering how to do this stuff); and the Social Outcomes Fund – which may be of more interest to commissioners and others since it involves government putting up some money to stimulate the market in SIBs.
We played a small part in the development of the Social Outcomes Fund, since it was one of the recommendations made in the report we co-authored with the Cabinet Office (in a previous life) on the feasibility of applying SIBs/PBR to troubled families. The principle of a SIB is that interventions to solve a social problem are funded from future savings to the commissioner and others. One of our findings was that it is difficult to persuade those who benefit from a successful SIB or PBR scheme and are not the main commissioner to make a contribution.
This was also the experience of Essex County Council when trying to get contributions to its SIB aimed at keeping older children out of care or custody (the launch of which, along with another SIB aimed at homeless rough sleepers in London, was also announced at the same event)
So the purpose of the fund – as made clear by Ministers at the launch event – is to enable those wanting to set up a SIB to apply for the fund if they cannot get contributions direct from other bodies. The Cabinet Office also hope that the Fund will help grow the market for SIBs and similar schemes – which have been slower to take off than many hoped Other sources of funding are starting to emerge which have similar aims – such as the impending Results Fund being set up by Big Society Capital.
In our view (we could hardly say otherwise) the Social Outcomes Fund is undoubtedly a good thing. The developing debate is whether SIBs and similar schemes will ever get to the sort of scale where they can make a real difference to social outcomes and – by extension – start to really impact on the costs of social problems. The general view at the launch from all sides (investors, commissioners and policy makers) seemed to be that things have moved on a good deal over the past couple of years, but there is still a way to go.