Choosenick. Notes and observations on service design, as well as other interesting things/thinking. By Nick Marsh.

Service Design Drinks London - Feb 25th! »« The why is it. The why is what makes journalism an adult game. The why...

Developing a sustainable social sector – are we missing the point (a bit)?

First blogged on the Sidekick site.

Last night I went to this RSA talk by social investment big beast Sir Ronald Cohen. It was very interesting, and good to hear Sir Ronnie's first hand account of how the social investment task force was setup (a phone call from the treasury), his experience raising finance for and running Bridges Ventures (It was hard and relied on his mates), and what he thinks of the potential of the darling of the social investment world, the Social Impact Bond (it could be amazing, as long as you can measure impact clearly).

However, despite all the interesting stuff I was left with two nagging thoughts that rather undermine it all.

Firstly, the reason Sir Ronald was asked to chair the social investment task force, and then do all the cool stuff he's doing, was because had made an absolute massive pile of cash through building up Apax partners in the 70s, 80s and 90s.

He gave various examples of how he's used connections made in the corporate / venture / finance world to raise money for his various funds, including Bridges. Fellow investors had come from Goldman and the like, and they saw it as a form of hard working philanthropy.

The point I'm coming to is that it felt like the best way to make an impact in the social sectors (which include charities, social enterprises and other hybrid organisational formats) is to make a stack of cash in the world of business, and then spend your time being clever about how you give it away or invest it. This is the prevailing view in the states, and despite the fancy language about social investment, the under capitalisation of the sector, the need for innovation in regulation as well as product design etc etc, the (limited) evidence on display last night was that the heavy hitters in social investment were already wealthy individuals.

The second thing I thought, that I think I wasn't supposed to think, was that all this work to create markets and instruments to unleash innovation and cleverness in solving social issues might be a case of not seeing the woods for the trees.

Sir Ronald's starting point for the talk was the observation that the public sector, government, isn't very good at creating innovative solutions, and is especially bad at investing in preventative measures and services. Hence, in his view, the need for the social impact bond which allows the government to invest, with minimal risk, in preventative services such as the recidivism service being run by St Giles in Peterborough.

The problem here, in my opinion, is why don't the government just do this stuff for them/ourselves!? Why are public sector workers so un-empowered to pursue sensible, useful solutions. The St Giles work is based on rock solid evidence that to stop people re-offending they need to be met at the prison gate, given somewhere to live and a job to do. If its so obvious, why doesn't HM Gov just do that, and why do they let people out without that support? It will reduce offending, reduce the prison population and eventually start contributing to the tax base. - Tom Jefford Chair of the Cambridgeshire Criminal Justice Board says that:

"What we do know is that if you supervise short-sentenced prisoners, if you offer them increased opportunities to access work, you overcome some of their barriers about accomodation, and you offer the level of personal support to those prisoners who would normally receive a probation-type level of supervision, they are far less likely to reoffend. What’s happened is that short-sentenced prisoners are released from prison with very little support if any support at all, and they very quickly return to offending and then go back into prison. So by creating investment that is going to work with this set of people, we would hope that they are going to reoffend at a much less rate."  [source]

So I say again - why has the government been doing this if they know it doesn't make sense?

Cohen's argument, which does ring true, is that there is value in the culture of social sector organisations that makes them better able to deliver these services as they are rooted in communities and not for profit. But again, er, surely that's what public servants and public services should be!

It just might be that in a headlong pursuit of innovative solutions for the social sector we're getting rather caught up in the glitzy shiny new stuff, which admittedly is much more fun, and we're loosing focus on the stuff that's broken:

Firstly, our public services desperately need reform to allow the people who work in them to innovate and act like the social entrepreneurs so many of them want to be.

Secondly, our view of business and the culture surrounding it needs equally urgent reform to encourage successful people to invest their money in people who are less fortunate then them, and to see the pursuit of profit and wealth as a means to a social end - improving quality of life for all - rather than a means to a private end - a porsche / etc.

That's not to say that the work that Cohen and others are doing in this sector isn't worthwhile, it is, and I'm really excited to be helping out and setting up our own social ventures, but it does mean we shouldn't divert our attention from the causes of this work - a dysfunctional, overly centralised public sector and a (sometimes) morally bankrupt commercial sector.
January 25th, 2011 / Trackback / Comments