Thursday 10 July 2014

Social Finance - Jury Out?

I go on holiday shortly so, as ever, one has to work twice as hard to get away, particularly when there is a forthcoming Trustees meting with a long agenda to get out. 
However, I was asked to brief some colleagues from a charity in Surrey that is considering expansion of its work by means of social finance, which made me revisit my various papers on this.

I wrote the first paper on Social Impact Bonds in Nov 2010, and with a member organisation pitched a really brilliant SIB proposition to Surrey CC, which was declined.

There are now some 22 SIBs underway in local authorities, and the momentum seems to be gathering….slowly. There is a Cabinet Office team working on social finance generally, and SIBs in particular. There are number of funding sources.  There are a stack of organisations working in this field : Big Society Capital, Social Finance, CAF Venturesome, Triados bank  and so on. Moreover the development of social finance fits exactly with my contention that the three sectors (public/private/charity ) are blending together.

Yet progress is still quite slow and the Peterborough Prison SIB has not been extended, which is telling. The advantage of SIBs is that the risk is off-loaded by the commissioner to the 3rd party funder – could be bond market or just a market loan, and innovation is supported, so there are real advantages, but on balance the jury is out as they seem to be overly complex.  

My holiday reading includes “David and Goliath” by Malcolm Gladwell of “Outliers” and nudging fame; “The Frugal Innovator” by Charles Leadbetter; a book on business start ups and Karl Barth’s “Dogmatics in Outline” – no, not the 14 volumes that costs £600 but the simple version! One of these is an outlier…..for otherwise there is a theme about start – ups…I wonder why ? Career no.3. calls! I will report on the reading soon…there are some novels too….compulsory! 
Mike

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