Delivering the social impact bond over the past three years has been an insightful learning experience, throwing up sometimes difficult challenges, which in the end helped us to develop as an organisation and deliver greater impact. Now at the end of this journey our minds inevitably turn to the learnings we have picked up along the way. What did we get right? And what did we get wrong?

Firstly, here are three things I think we got right:

1)  Picking the right investors:  investors don’t just provide the upfront capital, many expect to join your board and play an active part in the development of the organisation.  You therefore need to select partners that share your vision and who you know you can work with.  In our case, both Impetus-PEF and Big Society Capital provided much valued input into programme design, operational management and future business planning.

2)  Getting performance management right:  if you are only paid for your outcomes, you need to be really sure that you can produce them.  That begins with making sure that frontline staff understand the requirements, refining your programme design so that it can be delivered reliably and being able to regularly track progress.  For us it also meant investing in a business analyst who could help frontline staff with data collection and analysis; beefing up our IT and case management systems; and embedding a more data-driven culture into our meetings.

3)  Cherish your staff: funding is vital and systems help, but ultimately the achievement of impact comes down to the work of our amazing staff.  From investing in their learning and development, to celebrating their successes (and commiserating when things didn’t go so well), we try to never forget that in a social organisation like ours, people are our biggest asset.

That all sounds good right?  Well, there were a bunch of other things which didn’t go quite as planned.  Our top three lessons were:

1)  Don’t borrow more money than you need: we went for a very simple SIB structure, taking in all of the capital at the beginning and not paying any of it back until the end.  Capital can be expensive; taking the time to do a very thorough cash-flow model will literally pay dividends later.

2)  Don’t assume like-for-like results when you take pilot delivery to a larger scale:  in our case we found that there were fewer young people than we expected who required support to improve their attendance at school, but more than needed support to improve their academic attainment.  These require different approaches and we had to adapt our delivery model as we went along.

3) Don’t overestimate the capacity of delivery staff: in an effort to maximise outcomes we initially asked our staff to work with more young people than in our original business plan. As a result some of our initial results were lower than we expected.  Our socially-minded investors agreed to some tweaks to make the caseloads smaller, giving our coaches a bit more time with each young person.

Overall, delivering the SIB has been good for us.  From the frontline staff through to our board, we are a more impact-focused organisation than before.  But we also learned that while ambition is good, it needs to be tempered by realism and backed up by sound planning.

 

I’m delighted that we today announced the ThinkForward Social Impact Bond (SIB) has become one of the first in the world to successfully complete.  This is a truly fantastic achievement for the young people we support and we are proud to be one of the first charities to successfully use this model of social investment to tackle the issue of youth unemployment in the UK.

I first got involved back in 2010, when Impetus – The Private Equity Foundation carried out some research into the challenges young people faced in the school-to-work transition.  At that time one million young people were not in education, employment or training (NEET) and we were trying to work out how to prevent young people from being unemployed in the future.  The main finding of our research was that while there were often lots of services for young people, they were simply not reaching or effectively engaging the young people who needed them the most.

We identified the need for ‘Super Coaches’, who would work with schools to identify the young people most at risk of dropping out, build trusted relationships and then provide support over a sustained period of time.  To test this approach Impetus-PEF launched ThinkForward as a small pilot project in north-east London.

The pilot showed some good results and by the end of 2011 we were ready to expand.  By helpful coincidence, at that time the Department for Work and Pensions launched the Innovation Fund, which employed social investment partnerships to work with disadvantaged young people aged 14 years and over to prevent future youth unemployment.  We were successful in securing a payment-by-results contract that enabled us to scale the programme up to over 1000 young people across 14 schools.

Small charities like ThinkForward couldn’t usually engage in a payment-by-results contract, as we don’t have either the cash flow or the ability to access traditional lending opportunities.  The programme was made possible by a SIB; a form of social investment where charities work with commissioners and investors to resolve enduring social problems.  Initial capital from Impetus-PEF and Big Society Capital enabled us to get delivery started and then the Innovation Fund made payments directly linked to young people’s success, which both met the delivery costs and enabled a small return to investors.

We have had some amazing results and you can read more about it here.  Ninety percent of our participants aged 18 and over have progressed into further education, employment or training.  These are remarkable achievements, given that many of the young people we support have few or no positive role models in their lives and were predicted to drop out of education or become unemployed.  Instead, they have overcome their difficult personal circumstances and are making their first steps into their working lives.

As the first SIB addressing youth unemployment to complete, we hope this success paves the way for future use of social investment to build sustainable solutions to tackle the needs of disadvantaged young people in the UK.  For investors, SIBs offer a valid investment vehicle that can deliver both a sound financial and social return.  For charities, SIBs offer long term funding, allowing them to focus on delivering consistent results to those that need help the most.  Over the next week I will be blogging on the lessons learned from our experience, how we should measure the impact of SIBs and my reflections on what we need to develop more of them.

(Click on the image to view infographic enlarged)

As part of our mission to equip young people with the skills they need to make a successful transition into employment, we have created our own ThinkForward youth support apprenticeship and currently employ four young people from our programme in the role.

Youth support apprentices work alongside coaches at each ThinkForward school providing peer-to-peer mentoring support to other young people. This involves helping them access work experience and volunteering placements, matching them with employee mentors in our partner businesses, or encouraging them to get involved with community action projects.

Apprentices also coordinate monthly job clubs where those seeking work can meet other young people and access employability skills training.

ThinkForward youth support apprentices naturally add value by serving as role models, raising awareness about the programme and helping other young people to get involved.

As a charity committed to preventing young people from becoming NEET and enabling them to  realise their full potential, our apprenticeship programme brings significant benefits to the young people in these positions, our organisation as a whole and wider society in general. For example, the Centre for Economics and Business Research has estimated that when done right, apprenticeships can bring immense value, generating up to £34bn for the economy each year.

Having been through similar experiences themselves, youth support apprentices complement the work of the Coaches by helping them to earn the trust of the young people they support, which in turn increases engagement with those who are hardest to reach.

In addition to working on the frontline with Coaches in schools and the community, all ThinkForward apprentices are studying for business administration qualifications one day a week. This is part of the work-based learning opportunities that apprenticeships provide and all four apprentices have become fully integrated into ThinkForward’s operational working on a day-to-day basis and are relied upon by progression coaches and ThinkForward staff to provide the administrative support when needed.

If you are a business leader or employer that would like to take on a ThinkForward young person as an apprentice, contact Susannah. (Business Engagement Manager)