A different conversation
Social investment moves the discussion of agency budgets from “how to control costs” to a value conversation. The approach provides the evidence base for investments in programs that yield a social and governmental fiscal return. Expressed this way, the approach creates a business case for program investment.
This contrasts with traditional budgeting and initiative planning methods, which may focus more on short term outputs and cost efficiency. Done well, it can create a case for greater investment in improving lives so less can be spent responding to unemployment, poverty, chronic health issues and crime.
More public-private possibilities
Overseas experience suggests that, when social value concepts are integrated into procurement processes and policymaking, innovative public-private partnerships emerge, including with smaller, local partners.
In Canada, the community employment loan program in Ontario facilitates access to subordinated debt financing for small businesses that commit to hiring workers via community agencies. The terms of these community employment loans are linked directly to outcomes: for every employee a business hires from a community partner and retains for at least six months, the interest rate on the loan decreases.
Under the Netherlands’ Social Return on Investment policy, the Dutch "Buzinezzclub" is helping young people on welfare to gain employable skills. The program's success is measured by the number of participants who leave welfare. The government only pays for the service if it leads to a net reduction in welfare costs.
When governments use a social investment framework, interventions like this are considered alongside standard agency responses. They are not necessarily adopted, but they are explored, ensuring the government considers opportunities to use private capital to create better social outcomes.