So this is Christmas. And with another year over and a new one not yet begun, the pre-Budget report tells of untold riches in dormant accounts to be used to fund a social investment wholesale bank and projects for young people.
The latter will be routed through the Big Lottery Fund. I just hope – I really, really hope – that we’re not going to parcel this up and shovel it out as bog-standard capital and short-term, fixed-life, project-focused revenue grants.
Why? Because the ills of the funding status quo are so deep and well worn that they threaten to see off what Christmas cheer I might start to be feeling.
Let’s remember that the insistence on tying grants almost exclusively to short-term deliverables means that some of society’s most valuable work takes place in profoundly unstable institutions, because charities are over-stretched and under-capitalised.
In our crazy, dystopian status quo, immediate outputs are prioritised over long-term outcomes; funding is insufficiently flexible to respond to changing circumstances; planning horizons are typically limited to one or to three-year cycles: and because key staff are not retained, core knowledge and competence is lost.
Funding follows connections and charisma, not necessarily effectiveness. There is no incentive to outperform, because restricted funds are clawed back in the event of efficiency gains, or leveraging of other income. Demands for unrealistic exit plans concoct the fiction that complex, deep-seated problems can be solved in arbitrary, fixed and short time frames.
But it doesn’t have to be like this.
A number of funders have made great strides. The Big Lottery Fund has shown itself pretty adept at smart investment.
So what I really, really want this Christmas is for the Big Lottery Fund to look over the brow of the hill to those folk who’ll be getting excited about the social investment wholesale bank, and think hard about what social investment can teach us all.
In the past decade, a range of agencies, such as Venturesome and The Impetus Trust, have pioneered techniques for social investment. Perhaps too often we’ve focused on loans. For my money, the principle of investing in the underlying and long-term strength of institutions, not just the projects they carry out, is what really counts in social investment.
So when it comes to unclaimed assets, any investment in young people is going to be infinitely stronger if it’s informed by the patient-capital approach of social investment.
Happy Christmas.
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