Why SIB's won't work

I was reading Kyle McKay's article on Goldman Sachs new SIB programme and while I agree with the majority of his points, I think that the fundamental point is missed here...

Myth 3 for McKay is that "The government pays only for success" - McKay is concerned that it will be difficult to decide whether a programme is a success due to the contractual difficulties in defining success and that the government will therefore end up paying for projects that have not "succeeded".

This misses the point that the project developers will be incentivised to produce projects that are at least perceived to have "succeeded". This in itself would not appear to be a problem until you consider that a project that has succeeded in its fundamental aims, versus one that succeeds as per a written contract are two very different things.

As soon as a project is designed specifically with the aim of improving a measurable outcome, rather than with the fundamental outcome in mind, it runs the risk of becoming a self-fulfilling prophecy. Focus shifts away from the aims of the project and onto improving the KPIs. The key word there is "Indicator". A positive shift in a KPI does not reveal a project that is working, in the same way that a negative (or zero) shift would tarnish a project as failing.

SIBs could result in the government paying for programmes that are not effective. That's a true statement. It could also result in far more projects being run that are not effective at all. That is the issue here.

Social Entrepreneurs – driving the next wave of Not-For-Profits?

I've been working on a number of proposals for new projects recently. The organisation I'm on secondment to are working overtime at the moment on trying to secure funding for a whole range of different schemes and I've been right in the middle of it.

I've been amazed at how unstructured the process is here. I'm not sure whether this is a cultural thing, or whether it is an NGO thing, or if it's completely singular to the organisation I'm working with, but the approach is completely back to front at the moment. The good thing is that they're very open to new ideas and I'm already seeing some good new behaviours from the leadership team in terms of taking on board my ideas.

It's made me think about this whole issue though...does the social development sector as a whole suffer from a lack of skills in this area. It wouldn't surprise me – what makes someone a good fund-raiser and able to develop social strategies does not necessarily make that same person a good project manager.

I'm sure that there are people who spend their whole life in NGOs and the Charitable Sector who have never been given training on running a project, creating a budget or writing a proposal. And why should they have? I'm not saying that Big Corporations are the only ones who know how to do that – they're not. Unfortunately though, more often than not, it's someone from a Big Corp. or similar who's holding the purse strings, so being able to put something in front of them that they understand is vital in order to get access to funding – the life blood of any charitable organisation.

Which brings me to a term I heard today for the first time – social entrepreneur. I think it's a fantastic thought. The idea that there are entrepreneurs out there, business people, who understand how to make things happen, working to improve society. Yes, you might not find yourself amassing a personal fortune of $7bn like Mark Zuckerberg, but let's face it, if you're reading this post, chances are that's not your aim anyway!

So, social entrepreneurs – let's have more of them please. Let's take the lessons we've learnt as graduates of Big Corp. Plc. and apply them to the problems facing society today. Let's start our own Not-For-Profits and run them like businesses. Let's make them the best NFPs they can be and in the process maybe, just maybe, we'll make the world a better place at the same time.