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May 28, 2013

Financing social change

Executive Director’s note from Issue 4, May 2013.

Duncan Peppercorn

When I lived among a community of painters and potters in Wales in the 1990s, after-dinner, well-lubricated conversation would frequently turn to the fraught relationship between money and art. “They don’t mix!” was countered with “without money, you can’t mix much!” Working with arts companies 10 years later, a similar conversation about corporate sponsorship illuminated dessert and coffee. And here, in the social sector, we turn more often than not to the short-sightedness of government and the shortcomings of philanthropy.

We live in a marketplace. Capitalism relies on a price or cost being placed on everything so that a market can exist, including social goods. Sometimes, what society claims to want is not what it is able, or prepared to pay for. This isn’t market failure (a phrase bandied about a lot, wrongly): it is the market at work. But there are failures: a lack of transparency on costs, or the value of social change; a lack of mechanisms to fund social change; limited metrics to demonstrate progress and even a lack of understanding of how change can be engineered; and how innovation can create social change “profitably”.

This edition of the SVA Quarterly addresses a variety of topics related to these challenges. At the highest level, we report on the Shared Value Summit, at which Professor Michael Porter of Harvard University reaffirmed his belief that the profit motive has a much larger role to play in addressing social challenges. We also investigate innovative and challenging funding mechanisms for social change: social benefit bonds on the one hand, and creating a capital fund or engaging major donors on the other. We report further on the Goodstart deal and finally, we look at an example of innovative action in Queensland by Government to encourage the private sector to build smaller (and cheaper) housing.

Our readership continues to grow, and we remain committed to developing the best thinking from Australia. If there are things that you are interested in, please let us know; and don’t hesitate to contact the team directly if you think that we can assist you.

Duncan Peppercorn
Duncan Peppercorn
(Former) Executive Director SVA Consulting

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