Social Finance NL works together with and on behalf of the province of Noord-Brabant on setting up an outcomes fund with the objective of helping social enterprises to scale up and thus shape the purpose economy in the province.
In the purpose meaning, the focus is not on making a profit, but on the social added value of a business or initiative. The basic idea is that a world of equal opportunities for all is possible. Society must build a just world and a strong economy, in which responsibility lies with everyone: government, education, research, enterprises and citizens’ initiatives.
The province of Noord-Brabant wants to focus more on the purpose economy, but there are a number of bottlenecks, including the compartmentalised way in which money is allocated, in contrast with the integrated approach from multiple domains, perspectives and cooperation partners which is needed. Governments are also accustomed to taking financial values (such as savings) into account, while the purpose economy is about well-being, happiness and a pleasant living environment.
An outcomes fund can pay out to several projects after they have achieved predefined results. Payment to various individual SIB projects is therefore also possible, which means that the working capital is provided by a private investor. In such cases, private investors provide working capital to implementers to address the social challenge and the investors are repaid depending on the results achieved.
An outcomes fund thus offers the possibility to apply the results-oriented way of working to multiple locations, policy areas and organisations. Instead of constantly reinventing the wheel, we are working on a sustainable financing model. Within this, the stakeholders involved define an integrated approach to social issues. With a focus on outcomes instead of the method, and enabling implementers and enterprises to focus on the real needs of a target group or theme. This ensures an integrated approach, with the freedom to deliver customised solutions and contribute to sustainable outcomes.
For the project with the province of Noord-Brabant, the outcomes fund method is a way to stimulate solutions that contribute to the purpose economy. The province of Noord-Brabant, in collaboration with SFNL, has therefore started a pilot project to look at whether the outcomes fund can be used to develop a financing method that responds to this: the social issue as a starting point, payment on actual results achieved and the stimulation of public-private partnerships.
Intended deliverables of the Brabant Outcomes Fund pilot project
- At least 2 meaningful initiatives supported through an outcome-based contract (such as a Social Impact Bond) that contribute to the purpose economy and the four pillars of the outcomes fund.
- The start of an internal transformation in thinking and acting by employees of the province of Noord-Brabant in which decompartmentalisation, private-public partnerships and results-oriented financing are central.
- There are at least 30 meaningful initiatives on the radar that contribute to the purpose economy and the four pillars of the outcomes fund.
- The province of Noord-Brabant is demonstrably getting a name as a partner for meaningful initiatives.
The province of Noord-Brabant and Social Finance NL are in the process of setting up and opening up a competitive call for which meaningful initiatives, such as social enterprises, citizens’ initiatives, etc. that are ready for scaling up, can register. A selection procedure is then used to work towards a boot camp in which 3 to 5 meaningful initiatives are prepared to be able to work on their social issue and target group using a results-oriented business case, approach and financing contract.