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Accelerating the Impact Economy: How Government Can Get Us Into Gear

Have you ever wondered whether government has a role to play in the impact economy? Deloitte has, and they believe that everyone from impact investors to social entrepreneurs should understand what government can do to grow the space. For this special bi-weekly series, the Skoll World Forum and Forbes have partnered with Deloitte to discuss policies, politics, and possibilities for government to accelerate the impact economy.

 
 

Setting the Table: Who’s Who in the Impact Economy

Shrupti Shah

Director, GovLab, Deloitte Consulting

Ross D. Rocketto

GovLab Innovation Fellow, Deloitte Consulting

Rob Terrin

GovLab Innovation Fellow, Deloitte Consulting, LLP

The Impact Economy Abroad: What the US Can Learn From the UK, India and Australia

Ross D. Rocketto

GovLab Innovation Fellow, Deloitte Consulting

Rob Terrin

GovLab Innovation Fellow, Deloitte Consulting, LLP

Shrupti Shah

Director, GovLab, Deloitte Consulting

 

What is the Impact Economy Anyway?

Shrupti Shah

Director, GovLab, Deloitte Consulting

Ross D. Rocketto

GovLab Innovation Fellow, Deloitte Consulting

Rob Terrin

GovLab Innovation Fellow, Deloitte Consulting, LLP

 

An Important New Task for the U.S. Government

An Important New Task for the U.S. Government

Sonal Shah

Senior Fellow, Case Foundation

Jitinder Kohli

Director, Public Sector Practice, Monitor Deloitte

November 8, 2013 | 1309 views

 
  • Problem: Today’s challenges are more complicated and interconnected than ever before, and cannot be solved by a single actor or solution.
  • Barrier to Progress: That is why government has an opportunity to engage with the actors in the Impact Economy from non-profits to businesses.
  • Solution: Government is already experimenting with initiatives such as the Social Innovation Fund (SIF), the Small Business Administration’s (SBA) SBIC Impact Investing Program, and Social Impact Bonds (SIBs).

In a bygone era government was solely responsible for addressing the Nation’s biggest problems, from building the interstate highway system to the New Deal social programs. However, today’s challenges are more complicated and interconnected than ever before and cannot be solved by a single actor or solution. That is why government has an opportunity to engage with the actors in the Impact Economy from non-profits to businesses. The results could create jobs, drive new solutions, and catalyze a vibrant new economy.

The recent attention on healthcare represents an opportunity for philanthropies, nonprofits, and businesses to spawn new approaches to addressing these challenges. In the non-profit sector, organizations like the Nurse-Family Partnership are already providing low-income, expecting mothers, with preventative care in the form of a registered nurse until the child is two-years old.  They are getting real results. Mothers smoke less, and have fewer hypertensive disorders during pregnancy. For children, the program is improving school readiness, which includes improvements in language development and test scores. These results are not just good for the family, but for society.

Similarly, there are also market-based solutions such as Revolution Foods, which provides healthy school lunches and nutrition education to schools across the country. To date they’ve served approximately 33 million healthy lunches, while generating over $50 million in revenue in 2012.

These organizations have achieved success with significant support and investment from foundations and individuals, but what role can government play? Government has an opportunity to work with non-profits, the private sector, and organizations in between (such as social enterprises) to solve some of nation’s toughest challenges by catalyzing the Impact Economy. It is already experimenting with initiatives such as the Social Innovation Fund (SIF), the Small Business Administration’s (SBA) SBIC Impact Investing Program, and Social Impact Bonds (SIBs).

  • The SIF was created in 2010 at The Corporation for National and Community Service. The program leverages public and private resources to identify the most promising community solutions and help scale them. Additionally, each of these organizations matches the government funds dollar-for-dollar. The Social Innovation Fund is showing real results and has changed the conversation about scale and impact. This is leveraging the money and influence of government.
  • As previously explained, Social Impact Bonds are using private dollars to help pay for real outcomes. There are a number of policy areas where the bonds can be relevant, including health, education, recidivism, job training, etc. The bonds are focused on real outcomes, working with non-profits and the private sector. This is leveraging partnerships.

With government facing an increased demand for greater effectiveness, the Impact Economy is needed to bring together the best that government, philanthropy, and the private sector have to offer. Doing this requires a solutions-oriented approach that includes a variety of mechanisms to help achieve the greatest results — technology, new business models, access to information, and new financial instruments. Success will require new way of doing business.

Additionally, government is exploring ways to save money by working with the actors in the Impact Economy. In the next post we will explore a few ways that the Impact Economy can help government generate cost-savings, while delivering improved citizen services.

 
 
 

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