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REPORT – Funding Revolutions

It’s been a long, long time since it was a novel insight to say “a penny of prevention is worth a pound of cure.” But no matter how common the concepts of root causes and preventive or upstream investments become, our institutions have not scaled these investments to the levels our communities need.

This problem frustrates many social enterprise leaders in Manitoba. The impact  their work is having  on individuals’ lives and neighbourhoods results in significant, compounding returns to our communities and all levels of government. A recent Social Return On Investment evaluation initiated by the Province of Manitoba found social enterprises contracting with Manitoba Housing provided an economic return of $2.23 : $1.  When someone with multiple barriers to employment is provided a job opportunity with the necessary supports, all Manitobans benefit: families are united, a pathway out of poverty emerges, communities become stabilized, and the strain on our justice, health and social assistance systems is reduced.

But we are not seeing significant investments in the opportunities presented by social enterprise leaders. This is the challenge that motivates our release of “Funding Revolutions: A model for addressing the challenges of upstream investment in human services.” As a recommendation of the Manitoba Social Enterprise Strategy, this report puts forward a model that has the potential to support social enterprises to seize the opportunities they see.

Click here to read the report summary.

Click here to read the full report.

There is growing consensus across the political spectrum that it is more cost effective to invest in preventing social problems, before crisis occurs, than it is to invest in addressing the problem further down the road. However, significant barriers prevent this from happening. Some of the challenges highlighted in this report include:

  • The benefits of a Department X’s preventive investment may end up in Department Y’s budget, therefore Department X doesn’t have an incentive to make the preventive investment.
  • The time it takes for preventive investments to demonstrate their savings to government is longer than the volatile, political budget cycle.

The report, completed by Purpose Capital, addresses these challenges while presenting a model for making upstream investments in human services through a publicly-financed, pay-for-success investment fund, specifically designed to invest in innovative, preventive initiatives. Centrally located in the provincial government, the fund would be in a unique position to make investments that consider savings to government as a whole, avoiding the challenge of an investment coming from one department and generating savings for another. The fund would be a revolving fund, meaning the savings it creates for departments through its investments would replenish the fund . The result would be greater resources towards prevention, at a scale much greater than the status quo.

The model proposed here goes beyond social enterprise. Innovations in fields such as education and healthcare are well within the scope of investment opportunities for this fund. We’re glad to contribute this research to the dialogue and practice surrounding preventive investments, and encourage the Manitoba government to invest in the opportunities our social enterprise practitioners see.

Click here to read the report summary.

Click here to read the full report.