At Social Ventures Australia (SVA) we’ve been in the business of social innovation for over a decade.
Through our work in venture philanthropy, impact investing and consulting, we have the great pleasure of working alongside inspiring social entrepreneurs every day, and the good news is that innovation appears to be flourishing.
The challenge that persists, however, is how to take these innovations to scale. Why can’t we adopt effective new solutions across the whole community?
In the corporate world, there is a logical, sequential innovation cycle, where you innovate and test, replicate, and then expand to scale.
In order for this to occur in the social purpose sector, we need to better allocate our resources on the basis of the social outcomes that we are trying to achieve.
If we can effectively define and measure outcomes, this will inform program design and then enable effective solutions to attract the resources needed to reach more people, at the expense of less effective approaches.
However, there are a number of challenges in moving towards outcomes-based commissioning of services. So, how can we address these challenges?
1 – Supporting early stage innovators
While social disadvantage continues to exist, so too does the need to find new and better ways to improve the lives of people in need. The support of philanthropy is integral to early stage innovation in Australia, and this support is vital if new programs are to continue to emerge.
Venture philanthropy, where capacity building support is provided alongside funding, is important in equipping early stage projects to increase their reach and impact. Working with organisations to develop sound measurement and evaluation frameworks is particularly important in building a case for replication and scale.
2 – Making social outcomes data available
A lack of data on social outcomes is one of the biggest inhibitors to an effective innovation cycle. In the commercial world, ready access to the right information helps shape business models, provides parameters for risk and return, and gives funders confidence in the investment they are choosing to make.
That type of information isn’t consistently and easily available in the social purpose sector, but it could be.
In the UK, initiatives like Data Labs, which use existing government data to compare the impact of different services, and the Unit Cost Database, which publishes the cost to government of particular social outcomes (sleeping rough, for example), enable service providers to know they are developing programs that are more effective and efficient than current offerings, and to access vital performance metrics to enable continuous improvement.
Innovations like social impact bonds (SIBs) require definition and measurement of specific outcomes. Making more data available would open up many more opportunities, across a broader range of issue areas.
3 – Understanding drivers of disadvantage and effective interventions
Another significant barrier to an effective innovation cycle is that more in-depth research to understand the dynamics of disadvantage is sorely needed—including longitudinal studies. While funding research isn’t always the most attractive proposition for philanthropists, it is a great area of need. The impact of such funding on the ability to develop and scale effective solutions to disadvantage would be profound.
The Australian Teaching and Learning Toolkit Initiative provides one example of the role research can play in diffusing effective approaches to achieve system-level impact.
Based on an approach that has demonstrated success in the UK, the Toolkit Initiative provides new funding for world-class research into Australian educational practice, and shares this evidence through a free online toolkit that summarises research in plain English. We hope it will enable all schools to understand and implement the approaches that work best to improve educational outcomes for students facing disadvantage.
4 – Building political appetite to reform social service contracting
Finally, government must be willing to begin allocating its spending on an outcomes-focused basis. To do this, government will need to:
– Be clear about the outcomes it and the community want to achieve
– Provide access to appropriate information to measure performance
– Develop contracting frameworks to establish the correct incentives for service providers.
At SVA, we are driving this agenda both through the services we offer—in venture philanthropy, impact investment, and consulting—and through government advocacy.
It won’t be a quick shift but, if we can change the way we allocate resources to social challenges, ideas that are changing lives for pockets of people across the country, could change the lives of many, many more.
Rob Koczkar is Chief Executive Officer of Social Ventures Australia.