Trends in developing social innovation in Australia

It transipres that there is quite a lot of development work going on in Australia, just a google search away. On the one hand, there are a number of NGO think tanks (or rather do tanks, with a focus on action): TACSI here in Adelaide, the Australian Social Innovator Exchange in Melbourne and the Centre for Social Impact at the UniversityofNSW. Hurrah! This means that there is quite a lot of debate and experimenation going on addressing issues of social innovation establishment and maintenance. As well as the NGO sector, federal and state goverments have various investments in this space, in the guise of grants and departments. The Australian Senate has referred the question of financing the not-for-profit (NFP) sector to a Senate Committee, which itself refers to a Productivity Commission report, focussing heavily on social impact bonds. WA and NSW in particular seem to be following the SA lead. The NSW government has made AU$25m available for a pilot scheme of social impact bonds. All of this, it seems to me, makes Australia an exciting laboratory for social innovation at the moment: I think we can expect some big learnings to emerge from all this activity. The starting point seems to involve picking up on UK ideas of social impact bonds (SIBs). The UNSW Centre for Social Impact believes that economic conditions are right in NSW to pilot SIBs:

• Incorporated not-for-profits have the legal structure to issue bonds to local markets, and the ability to 'wear' the risk of a venture.
• NFPs get to set their own outcome criteria, free of government contractual obligations.
• Government gets to divorce itself from service delivery.
• Government get to reward success through payment of a return, called a social return on investment.

There are myriad challenges to the success of these watershed initiatives. Perhaps the most basic is how to measure social return, how to measure success? In this context, the Young Foundation has some brilliant contributions to make, particularly with its Wellbeing and Resilience Measurement tool, which seeks to measure a community's innate strengths. An additional issue is how to find the right balance regarding risk? The Young Foundation points to a historic mismatch, where the agencies tasked with delivering a particular service, don't get to own the social outcome they deliver. It seems to me SIBs redress that particular imbalance. However, issues of financial risk remain, and the task facing the NSW trial at the moment is to find the right balance of risk between government, not-for-profit bond issuers and social innovators. It will be fascinating watching these experiments unfold over time.