From the Editor: Associate Professor Kristy Muir, Research Director (Social Outcomes), the Centre for Social Impact

Around one in five people in Australia have a mental illness and almost one in five a disability, increasing their risk of being out of work, having a lower level of education and being socially isolated. We have rising health and aged care costs, but a shrinking workforce and the highest level of youth unemployment in more than a decade. More than half a million children (0-14 years) in Australia live in jobless families. We battle with housing affordability and availability, and homelessness. And the gap between Indigenous and non-Indigenous Australians remains vast in many areas. Australia’s position on the international inequity list has risen. This is not just a problem for those who are being left behind; it also affects the functioning of society and the stability of the economy.

This is at a time when we spend around $300 billion a year on social purpose and where government resources are becoming increasingly scarce. Now, more than ever, we need to concentrate on making progress on social outcomes. We need to focus on what we want to achieve, how we will meet these goals and whether, where, and under what circumstances, we’re making a difference.

Our social progress has arguably been stymied because we don’t or haven’t concentrated enough on outcomes. Together we’ve created a system that has good intentions, but more often focuses, counts and funds what and how much we do, rather than whether we are making a difference. We need to know whether people are really any better off. Are our children, young people, adults, our aged, families and communities are any happier, healthier, or have a better quality of life? Are they more able to participate in education, work, their communities and socially? Are people more resilient, included and connected? Do we know whether services, enterprises, innovations and supports are changing lives, communities and society? Do we know where to spend and shift our limited resources for social change? To be able to answer these questions, we need to focus on outcomes. We need to be clear on what outcomes we’re trying to achieve, how we can achieve them and if and where they are occurring.

There is a plethora of literature around on evaluation, outcomes and impact measurement. But outcomes measurement isn’t easy to navigate. This Knowledge Connect brings together a number of key thinkers in outcomes measurement who have published on:

–       Why measure outcomes (Hesbaek, 2014; Barraket & Yousefpour, 2013; Epstein & Yuthas, 2014; Lumley, 2013)

–       Frameworks and pathways for measurement (Epstein & Yuthas, 2014; International Integrated Reporting Council, 2013; Hesbaek, 2014);

–       How to measure outcomes (including, identifying quality indicators, metrics or evidence; Esptein & Yuthas, 2014; Schorr, 2012); and

–       Why we need to also understand how changes occur (Slay, 2014).

Although each of the pieces, reviewed by Simon Faivel, Roger Simnett and Stephen Bennett, focuses on different sectors, or a combination of sectors, key shared insights emerge.

Measurement matters because it can assist to achieve organisational learning, development and improved services/performance; accountability and compliance to stakeholders (funders, donors, tax payers); communication, branding and organisational legitimacy; increased efficiency; organisational benchmarking, competitiveness and sustainability; and, most importantly, improved outcomes (Barraket & Yousefpour, 2013; Epstein & Yuthas, 2014; Hesbaek, 2014; Lumley, 2014). At a time when resources are scarce and markets are shifting to empower consumers to decide which services and supports they choose to purchase (think, for example, about the National Disability Insurance Scheme), organisations who do not measure outcomes are likely to be left behind. So, why measure outcomes? In summary, despite the sector you’re from, the answer is because we can’t afford not to.

Most literature on outcomes measurement recommends taking a step-wise approach. Epstein and Yuthas (2014) and the International Integrated Reporting Framework (2014) recommend that the measurement pathway should be integrated into overall organisational purpose, strategy and reporting.

All of the authors reviewed recommend starting with a solid foundation. Getting the foundations right is critical. This includes an ‘organisational readiness’ for measurement (Barraket & Yousefpour, 2013) and mapping a theory of change (see for example New Philanthropy Capital’s four pillar approach to measurement, Hesbaek, 2014; Schorr, 2012; Epstein & Yuthas, 2014).

Once organisations are clear on what they can, need and want to measure, measurement methods need to be matched to rigorous approaches, quality evidence, stakeholder requirements and timing (Schorr, 2012; Lumley, 2013; Slay, 2014). Effective outcomes measurement relies on strong support and commitment from leaders and funders to measure outcomes (Barraket & Yousefpour, 2013), share outcome tools and transparently report findings (Schorr, 2012). Quality shared measurement will enable organisations to learn from each other, potentially save cost and time, increase quality, build an evidence base, and, hopefully, make social progress.

While individual evaluations can be important, if we continue to measure in silos, we are at risk of duplication, repeating the same mistakes, not being able to compare outcomes across intervention types or to solve the bigger picture social issues.

Now, more than ever as we face a major demographic shift, and as public spending shrinks in a diminishing social economy it’s time to measure what matters. It’s time to ask: Are we measuring what matters, measuring it well and tracking change at organisational, sector, local and population levels? We also need to ask the tough questions about what’s stopping us from effectively measuring outcomes, how we can overcome barriers to shared measurement and transparency and let go of concerns about precisely how much of a change can be attributed to each of us. Let’s progress the measurement of social outcomes for Australia.

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If you’re interested in contributing to the debate and discussion as to how we progress social outcomes measurement in Australia across all sectors and/or in exploring, learning about, building skills and developing a plan of action for outcomes measurement, you should join us at the Think Outcomes conference 20-21 November 2014, Sydney. The Centre for Social Impact is partnering Australian Research Alliance for Children and Youth (ARACY) and the Social Impact Measurement Network Australia (SIMNA) to present the two-day conference. CSI will also be launching a guide to measuring outcomes during the conference.

Download Print Version: Knowledge Connect – The Outcomes Issue – October 2014

When buyers use their purchasing power to achieve social outcomes beyond the products and services they require, they are undertaking social procurement. Social procurement is a strategic approach to procurement which allows organisations to achieve multiple outcomes through their procurement spend including:

• The creation of employment for marginalised groups and those excluded from the labour market; and
• Regenerating of local economies; and
• Ensuring fair work practices in developing countries.

Social procurement is gaining traction in Australia and internationally as governments and the private sector come to realise that greater value can be extracted from the procurement process. In the last five years:

• Advocates for social procurement have become more active;
• Supplier networks have been created to make it easier to buy from disability organisations, indigenous businesses and social enterprises;
• Guidelines and tools have been developed to support procurers to ‘buy social’;
• Research has been carried out into corporate and government buyers;
• Networks have emerged in NSW and Victoria; and
• There has been an increase in the amount of social procurement occurring.

This edition of Knowledge Connect utilises recent literature from Australia and overseas to explore social procurement as a tool for delivering social impact, and in particular to better understand what social value is created through social procurement.

Some interesting conclusions can be drawn from the review of literature on social procurement, particularly in identifying that the value created through social procurement differs for private buyers, public buyers, government finances and beneficiaries; the evidence for social procurement is compelling but sparse in relation to some outcome areas; and the critical role of enabling legislation and targets.

Social procurement generates different types of value to the different stakeholders involved. Corporations engaging with social procurement are generally driven by reputation enhancement and the associated community relations benefits. While government also enjoys these benefits, there are also significant benefits generated through employment and community wellbeing that often translate to savings for government. The value for beneficiaries ranges from marginal to life-changing.

The presumption that the value of social procurement is self-evident is unrealistic. There is implicit value in social procurement but there is implicit social value generated in all procurement. As such, capturing the added value is critical in building the evidence and broader adoption of social procurement. Social procurement is being evaluated in different ways, extensively in some fields and sparsely in others, and this is a critical challenge for social procurement. Different social objectives required different approaches, for example buying fair trade is different to buying local which is different again to bringing marginalised people into the labour market. This is not a barrier to all buyers but it often is for some government buyers and Treasury departments who are trying to demonstrate added value.

Social procurement in Australia does not require enabling legislation. Existing legislation does not prevent social procurement, however it does not encourage social procurement either. Nelson and Pound assert that there is a need for targets and benchmarks for social procurement in the UK. Targets and affirmative action through legislation in the US has driven over $100B per annum in government social procurement, creating employment opportunities for people with disabilities and economic inclusion for minority groups.

In this edition, we connect you with some of the most recent thinking on social procurement inspired by Social Traders’ recent research into Corporate Social Procurement in Australia and the social enterprise procurement exchange being established by Social Traders (the need for which was identified in the report). It provides a precursor to The Social Marketplace event – presented by the Centre for Social Impact – which will feature a stream on social procurement.

Mark Daniels
Editor, Knowledge Connect, Winter 2014

Mark Daniels has been involved, engaged and excited by social procurement since designing and awarding a cleaning services contract, containing social clauses, on the Atherton Gardens (Fitzroy) public housing estate in 2002. The contract required the successful tenderer to employ 35% of their labour force from unemployed public housing tenants living on the estate. Overnight, 15 public housing tenants got jobs and the estate’s joblessness rate went from 95% to 93%. With continued social procurement initiatives and job creation schemes the jobless rate at Atherton Gardens reduced to 81% by 2008. As well as being a buyer, Mark has worked in social enterprises delivering on socially procured contracts. Over the last six years he has been a social procurement advocate brokering many contracts between social enterprises and buyers in his role as the head of Market and Sector Development at Social Traders, a specialist social enterprise development organisation. Mark Daniels will be speaking at The Social Marketplace 2014.

Chris Newman is the guest editor for this edition. He came to social procurement through strategic procurement work he was undertaking with local government, where he saw community issues and needs on one side of council and procurement decisions on the other side and never the twain shall meet. The disconnect was not just about silos, it was about poor strategy. Chris now advises organisations across Australia on procurement practice and strategy through Arc Blue.

This year saw the release of the Federal Government’s Impact: Australia report, which issued a call to action for all of us to tip Australia past our current point of ‘uncoordinated innovation’. We have a series of innovative social impact investments in Australia, like the Social Benefit Bond and SEDIF, which have taken international ideas and have tailored them to the needs of an Australian context. But we do not yet have an effective, efficient marketplace to support the creation of social and environmental impact, and scale Australia’s social enterprises.

This edition of Knowledge Connect explores what we can collectively do to develop this social impact marketplace in Australia by developing a better understanding of the ecosystem and its interactions and interconnections.

We cover recent literature from leading international social marketplaces as well as Australia and explore perspectives from a variety of market actors.

There are some key themes that resonate through these resources: leveraging the diversity of many market actors; exploring the unique role of the social impact investor and importantly, ensuring the market remains driven by meaningful social purpose.

Firstly, it is critical that a social marketplace should leverage the many diverse actors in the ecosystem. Clark et al identify six market dynamics that characterise and define social impact investment, and highlight innovative ways that marketplace actors create new opportunities. The report by the UK Cabinet office considers how philanthropy can be used strategically to unlock capital and build capabilities in the social marketplace through co-mingled investment funds. Burkett identifies a diverse range of roles that are played by financial intermediaries in supporting the growth and sustainability of the social marketplace. This complements the detailed review by Gregory et al, which highlights the tensions and mismatches between market actors with respect to investment readiness.

Secondly, the unique role of the investor in social impact investing is one of capital provider, market maker, coach, verifier and policy maker, requiring them to be far more active than an investor in the traditional markets. Goldman and Bannick explore the need for investment to create industries in which enterprises trade rather than funding the enterprise alone. And Clark et al develops the concept of the active investor and how they interact with fund managers to create flexible platforms.

Finally, we are reminded in this period of growth and development to ensure we maintain a constant and careful focus on social purpose. Burkett argues that we must ensure that all investment marketplace is demand-led and driven by creating impact, defending against supply-driven mission drift. Ebrahim and Rangan inject some rationality into the debate over social impact measurement, by linking the social purpose to what may feasibly be expected of social impact measurement. And finally, Geoff Mulgan’s new book The Locus and the Bee, allows us to take a step back and consider how social impact investment fits into the broader landscape of capitalism, and leverages capitalism’s potent creative forces.

In this edition, we connect you with some of the most recent thinking on social impact investment as we convene a series of events in the coming months on building a marketplace for social investment. Links to these and further resources are provided if you cannot make our events in person, and please provide your comments and ideas through the blog.

Sandy Blackburn-Wright & Sarah Adams

Guest Editors, Knowledge Connect

The view that humanity and the planet are facing some of the most significant challenges in terms of survival that we have ever faced as a species is often front page news. The list is depressingly long but well known – global warming, environmental degradation, species extinction, wicked social problems and so on. And yet there appears to be numbness in our ability to respond, a fear, reluctance and even denial in accepting the unavoidable consequences. One hope, expressed through the ‘Corporate Responsibility movement’, has been that one of the institutions responsible for many of the items on the ‘depressing list’ can now also play a key role in addressing those very issues. There has been some progress but Corporate Responsibility has significant limitations in achieving transformational societal change.¹ The Third sector and government have not fared much better.

We believe a key reason for this ineffectiveness is that most change efforts have used inappropriate forms of intelligence and levels of consciousness in addressing complex issues. Intelligence is essentially about our ability to solve problems and think about them in different contexts. While the traditional rational intelligence usually used to solve logical or strategic problems (IQ) is important, as is the ability to empathise and display compassion with another’s situation (EQ), they need to be underpinned by Spiritual Intelligence (SQ) – the ability to access higher meaning, values and purpose through a greater level of self-awareness and consciousness.

It may seem counter intuitive to be suggesting that SQ (rather than IQ) is necessary for understanding and solving some of the complex societal problems that beset us. We are still at the beginning of the journey with respect to understanding SQ, however, much of the work reviewed here suggests that higher levels of SQ enable us to leverage our IQ and EQ in order to lead with meaning, purpose and compassion – to surrender to, embrace as well as address complexity, and begin to design institutions that we are yet to imagine.

An important issue therefore is whether and how we can cultivate SQ among emerging leaders within the business, non-profit and government sectors? How do we harness the use of a different form of individual and collective intelligence to that which has been used to date?

This edition of Knowledge Connect showcases some of the key ideas on Spiritual Intelligence (SQ) and its development over the last decade and a half.

We have structured this edition around three themes. The first is on the concept and foundations of SQ (the reviews of Zohar and Marshall and Wigglesworth). While informed by different theoretical perspectives, approaches and methods, book-ended together they show the increased maturity and ‘mainstreaming’ of the concept as well as the greater focus on the behavioural attributes of SQ. Importantly, as with all the work reviewed here, the term spiritual or spirituality has no necessary connection with religion, but rather draws on what can be termed a biological understanding of spirituality.²  Spirituality is seen as a unique and innately human trait that is physiologically determined and therefore can have both secular and theist expressions.

The second theme concerns leadership. While the work of Zohar and Marshall/Wigglesworth is explicitly concerned with the implications of SQ for leadership, there has been a growth in the Sustainability Leadership or Leadership for Sustainability literature. Much of this work has been concerned with identifying the traits, styles, skills and knowledge that sustainability leaders require to bring about change and transformation within organisations.³ One model of ‘sustainable leadership’ involves leaders exercising a duty of care for themselves as well as that of business and wider society. Hallmarks of sustainable leadership include the ability to reflect, maintain physical and mental well-being, have a sense of purpose that goes beyond self-interest and be able to make meaning of their work. Sustainable leadership also involves making sense of the world at an emotional and intuitive level.⁴ This work would benefit from being explicitly informed by SQ. From the multitude of books and articles on leadership,⁵ we have chosen two that we feel come closest to the SQ approach, the work of Integral theorist Barrett Brown, and Management academic and consultant Louis Fry (with Melissa Nisiewicz).

The third theme illustrates the practical application of SQ to areas like organisations and the workplace, as well as how it can assist in addressing complex social problems. A key reason that companies embark on the Corporate Responsibility journey is often to increase employee engagement; to provide the opportunities for employees to feel that their place of work is contributing to the broader community. The declining ability of religious institutions, political parties, community associations and the State to provide people with a sense of identity, belonging, purpose and meaning has meant that the demands on the workplace to provide such needs has risen commensurately.

The work of Lips-Wiersma and Morris offers a simple but deep SQ informed approach to bring humanity and meaning back to the workplace. Likewise Kahane’s Transformative Scenario Planning, which is for all intents and purposes an SQ-based methodology, will be essential for solving some of our toughest social problems and achieving positive social impact.

In addition to many benefits, capitalism and its associated financial system (which developed from IQ thinking) has also contributed to significant social and environmental challenges across the globe. We believe that a new way of thinking, consciousness and intelligence needs to emerge to help solve these intractable problems in a way that is authentic and based on genuine care.

The literature we have reviewed suggests that SQ, the ‘ultimate intelligence’, can be used to develop ourselves, our leaders and our organizations so that we are all better equipped to solve the wicked social and environmental problems we face to enable the creation of a sustainable society for generations to come. This is the intelligence for purpose and meaning, this is the foundation for achieving beneficial social impact.

Dr Gianni Zappalà & Anna Scott

Guest Editors, Knowledge Connect

[1] Gianni Zappalà, ‘Beyond Corporate Responsibility: The ‘Spiritual Turn’ and the rise of Conscious Business’, CSI Background Paper No. 6, February 2010.

[2] Gianni Zappalà, ‘Spirituality is the new black and it has a social impact!’ CSI Background Paper No. 1 May 2009.

[3] Wayne Visser & P. Courtice, ‘Sustainability Leadership: Linking Theory and Practice’, Cambridge Programme for Sustainability Leadership, 2011.

[4] Bill Critchley & T. Casserley, ‘Rethinking leadership for a sustainable future’, Ethical Corporation, June, 2011, pp.39-41.

[5] for example there are over 300,000 books on leadership listed on Amazon.

‘If a factory is torn down but the rationality which produced it is left standing, then that rationality will simply produce another factory. If a revolution destroys a government, but the systematic patterns of thought that produced that government are left intact, then those patterns will repeat themselves in the succeeding government. There’s so much talk about the system. And so little understanding.’

– Robert Pirsig (1974 p92)

In the quintessentially ‘70s book Zen and the Art of Motorcycle Maintenance, author Robert Pirsig explains the power and resilience of social systems.

Systems, whether local or global, often challenge and confound leaders interested in bringing about lasting and positive social change. I was fist exposed to systems thinking while working as a young manager struggling to implement organisational change programs. I was fortunate to attend one of the first workshops Peter Senge conducted in Australia, following the launch of his ground-breaking leadership book The Fifth Discipline in 1990. Most people who heard Senge speak came out convinced that by embracing systems thinking we would be able to work our way out of problems that had previously seemed intractable. Later, my masters’ research investigated three successful leaders of change and found that a capacity for systems thinking and self reflection and an openness to learning explained a large part of their success.

When we understand systems we see the world differently, and are better able to address complex and dynamic problems. Big-picture systems such as national economies, health care systems, markets or political systems all have sub-systems, which themselves have interconnected component parts. We saw the stark reality of this when the ripple effects of the recent global economic crisis took hold around the world.

In essence, ‘systems thinking’ entails a consideration of the whole and its parts, and the complexity, paradox and interconnections within them. It also involves examining a situation from multiple perspectives, looking for long term as well as short-term effects and consequences, and recognising patterns, cycles and relationships.

Systems thinking is something that is being embraced in the education and health sectors, but not necessarily elsewhere. This is not surprising; when we are captured in our own paradigms we are usually unaware of their existence, at least until we try to communicate with someone with a different paradigm! Self-awareness, and the ability to reflect honestly on our actions and mental models, is crucial.

Adopting a systems mindset changes not only how we think about a problem in the first place, but what the solutions might look like. For leaders, this may mean letting go of the need to find quick, ‘definitive’ answers. In a complex, interconnected world it is simply unrealistic to expect heroic leaders to come up with solutions to problems and take organisations forward on their own.

Ron Heifetz, whose work was reviewed in Knowledge Connect No. 7, has long been telling us that ‘adaptive challenges’, of the type faced by the social sector, will never be overcome by traditional ‘authority’ approaches to leadership, which look for certainty and quick results.

It is only by seeking the collective input of stakeholders, and embracing distributed leadership – leadership across and throughout an organisation – that systems thinking can be operationalised. This point has been reinforced by writers such as Otto Scharmer (Theory U) and Deborah Ancona (The Incomplete Leader).

In this edition of Knowledge Connect, we consider some key ideas on leadership and systems thinking, ideas that have direct relevance to the social sector. Guest reviewer Mehreen Faruqi revisits one of the seminal concepts driving systems thinking, Rittel and Webber’s idea of ‘wicked problems’. This important idea has been around for some time now, but few people have taken the trouble to go back to the source, which Faruqi does for us.

Our other guest reviewer Hokyu Hwang, looks at Suarez’ study of the multiple career journeys of social sector leaders. Also reviewed is Donella Meadow’s much-loved Primer on systems thinking, Faruqi’s work on leadership, complexity and change, and John Sterman’s essay on systems thinking and policy resistance in the public health and welfare sectors. Finally, the RSA considers one of Donella Meadow’s challenges to ‘expand the boundary of caring’ in Matthew Taylor’s essay on 21^st Century Enlightenment and its accompanying animation.

We leave the final word on leadership and systems thinking to Donella Meadows:

“We can’t impose our will on a system. We can listen to what the system tells us, and discover how its properties and our values can work together to bring forth something much better than could ever be produced by our will alone.”

Dr Tracy Wilcox

Guest Editor, Knowledge Connect

In the then Federal Government’s 2005 Giving Australia: Research on Philanthropy in Australia, it was estimated that a total of $11 billion of money, goods and services were donated to not-for-profit organisations. The $11 billion is made up of: $7.7 billion from individuals and $3.3 billion from businesses.

While the report did identify planned giving as a separate category (but with very little data) it was not considered significant enough for quantification.

Philanthropy, therefore, is a comparatively small slice of the total giving pie compared with individual giving. It is positively tiny compared to government funding of the non-profit sector.

Why then does philanthropy have such prominence? Why do we care?

For many it is because it is money not subject to shareholders or the ballot box. With it, organisations can be entrepreneurial and investors have a high tolerance for risk. It is money that can be directed to the new, the innovative, and in some cases, the unpopular.

For others, it is not just the ‘power of the purse’ but the various forms of influence that come with it. It gives the ability to connect people and organisations across silos, borders, geographies, cultures, sectors and spectrums to build powerful networks and coalitions to effect change.

As Marcos Kisil, Institute for Development and Social Investment in Brazil, cautions: “High Net Worth Individuals are not only economically powerful, they are also influential in the political and social life of the countries where they live and made their original fortunes. Their actions and attitudes and the use they make of their wealth are followed by the media. In some ways they can serve as a beacon for good, and unhappily for bad.”

As governments around the world face increasing financial stress, they withdraw funding from civil society organisations. Increasingly philanthropy, which crosses social, economic, and public policy sectors, that are having greater influence in addressing the most challenging of our social and environmental issues.

In this edition of Knowledge Connect we look at why philanthropy matters and review the different views on the issues of power, influence and accountability – the very issues that the philanthropy sector itself finds the most challenging.

Gina Anderson

Guest Editor, Knowledge Connect

Before looking deeper into the topic of                 Fairtrade, I would like to establish an important distinction the public may not have yet fully grasped: the distinction between Fair Trade (2 words) and Fairtrade (1 word):

Fair Trade is a movement rooted in trade justice and human solidarity. This view is supported by the World Fair Trade Organisation (WFTO) – formerly known as the International Fair Trade Association (IFAT)) – through marketing goods that follow alternative distribution channels characterised by shared understanding of fairness and trading partnerships. (Dolan 2010).

The Fair Trade movement further developed and commercialised under the Fairtrade label. This process focusses on certification and market expansion and is supported by the Fairtrade Labelling Organisations International. What Fairtrade aims to do is support the Fair Trade movement by marketing goods that follow mainstream distribution channels characterised by mass retailers and multinationals’ involvement. (Low and Davenport 2005; Dolan 2010).

In a nutshell, the Fair Trade movement aims to combat world inequalities by modifying the structures of world trade considered unjust (Steinrücken and Jaenichen 2007). Fairtrade attempts to solve social justice issues through international trade (McMurtry 2009) by:

1. “providing a working model of international trade that empowers the producers and the consumers that engage in it” (Moore 2004: 74); and,
2. challenging conventional business practices by being a “tool for modifying the dominant economic model” (Renard 2003: 91; see also Moore 2004).

Fair Trade proponents position the movement as an alternative to traditional trade, emphasising ethical claims and models of social justice. Some argue its commercialisation through the mainstreaming of the Fairtrade label will result in the movement losing its radical edge. Indeed, advocating the involvement of traditionally profit-oriented actors in a market developed to counteract the very effect of the dominant economic model may appear paradoxical.

With this Knowledge Connect I would like to take the opportunity to look deeper into Fairtrade’s potential institutionalisation through the certification scheme and the impact of such on the movement itself.

Dr Fanny Salignac

Guest Editor, Knowledge Connect

Perhaps the most recognisable facet of this interest has been the rise of ‘design thinking’ not only in business, but increasingly in public service and policy fields.  Fuelled by design agencies such as           IDEO in the US, non-profit bodies such as the Design Council in the UK, and education institutions such as Stanford’s ‘d.school’, design thinking has begun to be recognised as a key ingredient underpinning innovation (whether that be social innovation or not).  Indeed, according to Sir George Cox, past chairman of the Design Council, design is what bridges creativity (the generation of new ideas) and innovation (the successful implementation of new ideas).  In other words, design could be described as:
“the human power to conceive, plan, and realize products that serve human beings in the accomplishment of     any individual or collective purpose” (Richard Buchanan, 2001).

The purpose of this overview is to introduce readers to the enormous and growing range of work that links design and social innovation – it is merely a taste tester for a much larger feast of practice and analysis that is emerging around the world.  In it I have tried to incorporate a range of different perspectives – some that are embracing of design approaches and their potential to contribute to social innovation, and others that are more critical, urging some caution in the use of such approaches.

In traversing a range of literature I have also drawn on the assistance of two practitioners and a design critic in the review process.  I invited two guest reviewers (Joanne Hutchinson from the Social Innovation Branch in DEEWR, and Jacqueline Wechsler, a user-centred design consultant) to share with readers their thoughts about a design book or article that they have applied in their work.  These reviews are important in the context of this literature review as the exploration of design in social innovation is not just an academic exercise, and despite some critical insights from academics in the works reviewed here, design is practical by its very nature.  Both of the guest reviewers enthusiastically explore a book that they have used in their practice and I think these reviews in particular will inspire readers to seek out further literature exploring design and social innovation.

I also sought out a contribution from a recent design graduate, Vera Sacchetti, who, in her Masters thesis from the School of Visual Arts in New York, critically explored the emerging field of ‘social design’ in the US.  Vera has kindly allowed me to include an excerpt from her insightful thesis to highlight some of the emerging tensions amidst the possibilities of social design.

Indeed, the application of design methods and approaches to social innovation has raised a number of important questions, many of which are taken up to some extent in the articles and books reviewed here:
–    can the addition of design methods, design thinking or design techniques really enhance social innovation or help us to develop more impactful social services?
–    what is it about design approaches that has the potential for significant changes in the way we approach social innovation?
–    can anyone apply design approaches to the arena of social innovation or does it require the involvement of professional designers?
–    do designers have an adequate grounding in social sciences and the history of social intervention to be able to apply their skills to addressing social issues?

I personally believe that the growing interest in the application of design methods to social innovation is very exciting – for two key reasons. First is the potential of design to fundamentally alter the way public services and civil society engage with citizens and to bring the ‘users’ (aka ‘clients’, ‘consumers’, ‘constituents’) back into the centre of how we imagine and implement services in the social sector.

Second, the methods of design start from action and then refine and learn from this action (referred to as ‘prototyping’ in the design field).  This is exciting because for too long we have been flipping between two poles in the social policy and community services area.  One pole is defined by an unhealthy obsession with strategy and planning (exemplified in but not limited to logframe analysis) prior to any action occurring.  The other is focused on political reactionism whereby projects can be funded because are politically expedient.  Without drawing on any previous learning such projects must often be ‘delivered’ or at least funds expended in very short time frames that everyone knows will not lead to any significant or long-term changes.
So, conversations which begin with ‘users’ and focus on action learning represent some of the most refreshing and innovative conversations I’ve heard happening in this sector for a long time.  A starting point of design is also bringing into the dialogue a rich diversity of disciplines and a cross-sector flavour which opens up the possibilities for enacting real change in relation to some of our most pressing social issues.  In the social sector we are no longer merely talking amongst ourselves and this has got to be a good thing!

Finally, I have tried to present a balanced picture of the possibilities and the critiques of applying design methods to social innovation.  At times I have possibly swung too far into the critical literature.  However I urge readers not to be discouraged by some of the critical thinking presented here.  Indeed I believe that if design is truly to find a place and have an influence in the way we approach social innovation then we need both to enthusiastically embrace its potential and energetically critique its application.  If there’s anything I’ve learnt over the twenty years that I’ve been working in the social sector, it’s that we should be very wary of simplistic answers and silver bullets.  Design approaches, design thinking and design disciplines do not provide panaceas for solving social ills.  What they have the potential to add to the mix, however, is something that takes us out of the dominant paradigm of strategic planning, logframes and politically-driven project agendas into a landscape that helps us think and act on ways in which real change is not only possible but can be turned into reality.

To help readers I have mapped the articles reviewed in this edition of Knowledge Connect on a matrix that gives a sense of whether they are more analytical, or more practical, and whether they are grounded in specific case studies or present a big-picture perspective on design and social innovation.

I would also recommend to readers that they explore the many agencies, organisations, practitioners and networks operating in this space, many of which are outlined in a map at the end of the review.  I should also point out that there is a broader annotated bibliography exploring design and the social sector that has been produced by Australia casino Courtney Drake and William Drenttel from Yale University’s School of Management should readers be interested in exploring further literature (available at: changeobserver.designobserver.com/feature/design-and-the-social-sector-an-annotated-bibliography/30158/).  Finally, for an excellent primer on social innovation that makes substantial links to the role of design, I would recommend the ‘Open Book of Social Innovation’ (published by NESTA and the Young Foundation in the UK, published in 2010 and available at:  www.nesta.org.uk/library/documents/Social_Innovator_020310.pdf).

Click image below to enlarge.

Dr Ingrid Burkett

Guest Editor, Knowledge Connect

Alongside the continuing emergence of innovative start-up social enterprises and          businesses is the reality that the field has matured sufficiently to begin to measure impact: some established social ventures have scaled up and succeeded and some have failed.

Hence I have included the recently published case study of Better Place a bold and exciting start-up (the second largest in history), which aims to transform the existing mature automotive industry and drive massive social change by reducing, if not eliminating, our reliance on the internal combustion engine and petroleum.

Too Good to Fail, by contrast, is the first in-depth look at the failure of the iconic American 37 year old social enterprise, ShoreBank. The lessons extracted thus far make for compelling reading, especially the role of “toxic politics” in its demise.

CSI’s ongoing interest and involvement in public policy has us following the UK’s Big Society experiment with great interest. The Building a Stronger Civil Society document sets out the first steps the UK government will take. There is also a reference to the important role the government sees mutuals playing in this “smaller state” future.

Complementary to this is the paper presented to the International Social Innovation Research Conference I attended in September in London, Legislating for Social Value? The analysis of the debate on a Conservative MP’s Private Member’s Bill seeking to enshrine social value and the australia casino place of social enterprises provides fascinating evidence of the contradictory discourse between the public policy face of the Big Society initiatives and the ideological beliefs expressed by the Conservative speakers. The very recent amendments to the bill reflect this and call into question the commitment of a large number of Conservatives to the Big Society vision.

Social entrepreneurship in its more mature phase has also attracted its share of myths. The Illusions of Entrepreneurship is reviewed with this in mind.

You can get involved in discussing social entrepreneurship by reading and commenting on these related blogs and bringing an Australian perspective to a global discussion:

secure.csi.edu.au/site/Home/Blog.aspx (see A Bill to enshrine social value: A Big Society agenda? Sep 23, 2011)

www.ssireview.org/opinion

www.socialedge.org/blogs

Cheryl Kernot

Guest Editor, Knowledge Connect

In global philanthropy today we are seeing the emergence of a generation of philanthropists who value impact and effectiveness over intentions. These philanthropists are beginning to demand rigorous evidence bases to underpin their investment allocation decisions. And in doing so, they confront the problem of the gap between the theory of social impact measurement and the enormous practical difficulties in measuring social value in the real world setting. In this edition of Knowledge Connect, we examine the principal global forces guiding these changes in emphasis and link them to local Australian expressions.

This is a fast-moving field. Knowledge is being created in many places outside the traditional university setting. Foundations and philanthropists themselves, the consultants who advise them and the wealth management industry are all contributors to the knowledge base, often in dialogue with academic partners. Dissemination of this new understanding seems to be proliferating amongst philanthropists, but in Australia this is happening less among the not-for-profits and social enterprises that they fund. We hope that this edition will provide a taste and an overview of the big themes and trends, global and national, in the field of philanthropy so that not-for-profits (NFPs) and others in the community sector can locate their own practice in this new world of expectations.

‘Impact over intentions’ summarises the attitude of philanthropists described in the book ‘Philanthrocapitalism’. Under this theme we also review Four Revolutions in Global Philanthropy which identifies four key developments in the transformation of the market for social good creation.

While there is a long way to go, we also showcase Giving Well, a website that rigorously analyses charities and compares their capacity to save and change lives. These are but tentative steps toward robust comparison. This edition also reviews A Transformational Role – Donor and Charity Perspectives on Major Giving in Australia which gives voice to the perceptions and concerns of both philanthropists and fundraisers. Why do people give money? A review of over 500 scholarly articles distills reasons for giving to a set of eight explanations.  We also explore the policy levers being used to encourage broad-based giving using the recently released UK Giving White Paper. Finally, we examine the globalisation of wealth and review the latest World-wealth-report-2011 for insights on trends of where the wealth is and the implications of the changing distribution of wealth for global philanthropy.

Elena Douglas and Paul Flatau, CSI (UWA)

Guest Editors, Knowledge Connect