Social media has revolutionized public communications in ways that could not have been imagined a decade ago. Social innovators are on course to do the same thing in the area of public service delivery, particularly in the area of social and community services.
Governments have been slow to catch on to this and some public sector unions are concerned about where it is heading. But the train is leaving the station.
To put this in some context, Canadian policy makers tend to be cautious followers of big new trends in public policy and public administration.
Innovations in public administration have to be pretty well road-tested before the federal government will go near them. Like other federal states Canada benefits from the laboratory of provincial innovations. The best example of this is the replicated success of integrated service delivery models at the provincial level, which eventually led to the creation of <a href="http://www.servicecanada.gc.ca/eng/home.shtml">Service Canada.</a>
For example, the concept of social impact bonds (SIBs), which are now well-entrenched in the U.K., Australian states and in the U.S., is incubating slowly at the federal and provincial levels. SIBs are a mechanism for attracting private and not-for-profit capital and expertise as part of an effort to address under-funded and tough-to address social issues. U.S. President Barack Obama has earmarked $100 million in the 2012 budget plan for up to seven <a href="http://www.whitehouse.gov/omb/factsheet/paying-for-success">Pay for Success Bonds.</a>
SIBs involve contracts between governments and private or third-sector providers for the achievement of desired social outcomes such as reducing recidivism in young offender populations.  Social investors provide the upfront funds to finance the service provider. If the desired outcomes are achieved, investors can recoup their investment together with a dividend. If the results are not achieved, the government does not pay.
The federal government dipped its toes in the water earlier this week. Human Resources Minister Diane Finley said the government would contract with non-profits or private businesses in areas such as building affordable housing, counselling ex-convicts to keep them from reoffending and working with at-risk youth. She said the initiative is a new way of <a href="http://www.hrsdc.gc.ca/eng/consultations/social_finance/report/report_eng.pdf">“unlocking innovation in local communities” </a>as part of an effort to address otherwise intractable social and economic issues.
Progressive Conservative leader Tim Hudak is also a fan of social impact bonds, which are featured in his December 2012 discussion paper <a href="http://www.ontariopc.com/news/tim-hudak-a-fresh-start-for-children-and-youth/">Fresh Start for Children and Youth</a>.
Critics say that SIB-like initiatives will siphon away already tight funding from public sector providers and not-for-profits.
On the other hand, a number of not-for-profit outfits have in fact been quietly and effectively lobbying the federal and provincial governments – especially in Ontario – to take a more active role in enabling the funding and capacity embedded in the country’s social enterprises.  These include activist heavyweights such as Toronto’s <a href="http://socialinnovation.ca/">Centre for Social Innovation </a>and British Columbia's <a href="https://www.vancity.com/">Vancity credit union</a>. And they have a much broader vision than social impact bonds.
Just as social media is often outpacing government communications, social entrepreneurs are moving faster than governments in developing new solutions to social and economic challenges. They are doing this through the broader lens of social capital. Cash-poor governments are beginning to see the light and are thinking about jumping on board before they are left behind.
The <a href="http://www.fin.gov.on.ca/en/budget/ontariobudgets/2011/">2011 Ontario budget</a> noted that “Social enterprise, which uses private markets to pursue public goals, aiming to blend social and economic value, presents an important opportunity for service delivery partnerships.” This was in advance of Don Drummond’s call to action on this area in his <a href="http://www.fin.gov.on.ca/en/reformcommission/">2012 report of reforming public service delivery in Ontario</a>.  The 2012 Ontario budget announced an exploration phase for the development of “new partnerships that encourage improved outcomes at a lower cost by transforming traditional approaches to the delivery of services.”
The Centre for Impact Investing at MaRS in Toronto sponsored a Canadian Task Force on Social Finance report, <a href="http://socialfinance.ca/uploads/documents/TFSF_ProgressReport_YearOne.pdf">Mobilizing Private Capital for Public Good,</a> which was issued in December 2010. It suggests an integrated national strategy for building Canada’s social ﬁnance marketplace.
The report focuses a lot on “impact investment funds” and “mission-related investments”.  The underlying assumption is that intractable problems can be addressed with smart, connected and highly targeted local initiatives that draw on funding pools crossing all sectors. A role is seen for private sector investment but social innovators are for the most part agnostic about politics and the lines between economic sectors.
There are all sorts of questions about this approach but it deserves some attention, especially since current government-driven approaches are not working as well as they should.
<h4>What next?</h4>
This is obviously a bigger story than social impact bonds, which offer a relatively narrow social finance tool to increase the scale of existing evidence-based programs.
Municipal governments, community organizations and non-profits are finding new solutions to tough problems and are ready to partner with government to test and demonstrate the value of their models in new communities or expand it within their own. In the absence of government support they will continue to do this alone.
Governments should be taking a close look at these new ideas and supporting them, especially where they provide opportunities to solve entrenched problems.
The basics of a closer partnership would include a shared understanding of challenges and opportunities, including a common language, and sharing effective practices from across communities (such as the design of shared measurement frameworks, new financial tools and governance structures, or customized IT systems).
This should be done with the same public interest safeguards that would be in place in any other public policy exercise.
It should not involve government abandoning its critical role in the design and delivery of public services. It is rather about examining every opportunity to make sure those services meet the needs of vulnerable Ontarians. In the present case this simply means that the province should be looking carefully at opportunities arising from the laboratory of municipal and community-based experimentation with new approaches to service delivery.

Social entrepreneurs deserve support in new approaches

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