Innovation In Giving

Cabinet Office

Innovation in Giving

The Open Innovation Programme, journey so far

Nicole Wilkinson

I recently had the pleasure of meeting staff from the 10 charities that are being supported through the Open Innovation Programme as part of the Cabinet Office’s Innovation in Giving Fund to officially launch phase two of the programme.

Whilst the focus of the phase two event was firmly upon looking forward and ensuring effective delivery of the exciting and ambitious innovations that have been developed, the launch of phase two also provided an opportunity to pause and reflect on some of the learning from the development phase (phase one.)

During the course of phase one, all charities kept individual learning logs to capture key developments and reflections. Whilst these are only simple tools, they have yielded some interesting insights that, in the spirit of the programme and Nesta’s commitment to legibility, it felt valuable to share. This is by no means an exhaustive list but covers off some of the main themes that came back:

1.Open innovation is a relatively new process for many in the charity sector: Open innovation is relatively established in the commercial sector, with companies such as Kraft Foods Collaboration Kitchen being regularly cited as leading examples. However, whilst the 28 charities selected onto phase one of the programme demonstrated a genuine appetite for open innovation, this was a new methodology and way of working for nearly all of them – 64% of charities participating in the programme defined themselves as having little or no organisational experience of open innovation at the start of phase one.

This meant that for many charities, significant time investment was required to build internal buy-in, commitment and overcome (understandable) reticence about discussing giving challenges with external organisations and developing collaborative solutions to these challenges that share the risk and reward.

Encouragingly, by the end of phase one, 68% of charities defined themselves as having significant skills in open innovation, with 5% defining themselves as expert with the role of programme support identified as central in developing this (see point 2.)

2. The value of having the space, legitimacy and agency to innovate: 86% of charities defined the phase one process as very valuable for them. Within this, what emerges strongly from the qualitative insight is the value charities gained through the phase one process providing them with the legitimacy and agency needed to justify spending time working on longer term innovation. In particular, the feedback centered upon the support of a dedicated coach and Nesta enabling:

  • staff members to have new types of conversation internally – sometimes quite challenging ones – to address internal barriers
  • bring together sometimes quite disparate teams to collaborate around shared organisational giving challenges
  • the space to look outside of their organisation and engage new partners

3.     The open innovation journey is rarely linear: It’s a cliché but one that certainly appears to be borne out in phase one. We asked charities to record their confidence in achieving their phase one objectives on a monthly basis over the course of phase one. At the aggregate level across the charities in the portfolio, 95% of charities self-defined as having mostly or completely achieved the phase one objectives they had set and we see a steady increase in open innovation skills and confidence over the course of phase – which is clearly in line with what we would expect.

However, when delving into the detail of individual charity journey’s, it’s obvious that aggregate trends mask significant differences. For some, there is steady upward trend in confidence. However for others, a graphical representation of their levels of confidence over the course of phase one shows a more challenging journey with notable peaks and troughs as charities really unpacked their giving challenges and began to develop collaborative solutions to them, often through several very different iterations.

In addition, we observed that charities were often running several components of the open innovation process concurrently, rather than in linear progression. Both of these points reflect key learning from open innovation case studies in the commercial sector and that the phase two portfolio contains charities with varied innovation journey’s feels very valuable to the next stage of the programme.

4.     A flexible approach is vital: This applies both to Nesta’s model of delivery support and to the behaviour needed from charities. In particular, over the course of phase one, we saw charities explore a number of giving challenges and a number of emerging partnerships / consortiums develop to address these.

Some of these consortia grew legs and formed the basis of developing collaborative solutions. Others came together to explore challenges and ideas, before deciding to go their separate ways – often because organisation’s didn’t feel they had the right skills and experience to add value to where conversations were heading.

This birth, re-birth and sometimes death of risk/reward-sharing partnerships is inherent in the open innovation process and can be where a significant proportion of the value is derived from. Charities fed back that even if partnerships didn’t gain traction, the process of sharing ideas with a range of partners was often useful in broadening horizons and adding fresh perspectives. However, this requires flexibility to ‘ride out’ the journey which can present challenges in keeping stakeholders and internal decision makers engaged with the progress of the programme.

5.     Time can be a challenge and a motivating factor: The phase one process ran from early July through to mid-October, presenting a relatively short timeframe in which to cover significant ground, which we acknowledged from the outset may be challenging. The feedback from charities on this has been interesting – several charities have stated that a relatively ambitious, time-bound project proved useful in generating and sustaining momentum for innovation and reducing barriers such as extended internal sign-off periods, accelerating review processes and necessitating disparate team coming together.

So what does this mean for phase two?

So, as we set our eyes firmly on phase two, we have tried to incorporate this learning into the design and structure of programme support. This includes:

  • Running more flexible support workshops
  • Ramping up the support and coaching provision for charities in phase two
  • Continuing to run networking events bringing together a range of charities, social businesses, start-ups and social enterprise to provide space for collaboration
  • Supporting continued learning and sharing within the cohort and with the wider sector

I look forward to updating you on progress…..

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Innovation in Giving

Small Business Saturday: what about every day?

Theo Keane

Last week Chuka Umunna, the Shadow Business Secretary, called for the UK to adopt a US initiative ‘Small Business Saturday’, which once a year urges consumers to shop at local independent stores. And in a poll taken by the Guardian last week (January 2nd), an overwhelming majority of respondents (83%) thought it was a good idea.

I agree with them, it’s a very good idea. It offers a small but simple and effective way to celebrate local businesses and the hugely important role they play in our communities. From local communities to the more ambiguous ‘shared interest’ communities, there are inspiring examples of people encouraging local enterprise and social action: from London currency Brixton Pound to the GoodGym’s ‘runners that do good’

But here at Nesta we’re looking to go much further. Soon, we are going to launch a programme which will bring businesses and civil society groups together in new ways; exploring new modes of giving and exchanging time, resources and skills and celebrating partnerships where acting together, locally, is business-as-usual.

We want to encourage businesses to support their community in new ways, as well as asking communities to support their local businesses.

In researching and scoping the programme we’ve discovered an extremely crowded landscape. There is considerable work going on across all sectors to understand the levels and modes of SMEs contributing to their local communities, to structure the thinking around effective engagement policy and practice. There are a lot of dedicated people out there.

But what is apparent is that the brokerage system between sectors is fragmented into myriad organisations that are difficult to navigate and understand, and that employee contribution to their local communities is unknown or under-recognised by employers, particularly if it is inconsistent with the core giving agenda of the business.

What we need to do to have real impact is to make business giving and its relationship to the development of flourishing communities much more accessible, visible, relevant to and aligned with local needs and aspirations.

Digital technologies and new approaches to business giving are beginning to address this brokerage gap, and I’m privileged and excited to have recently met, and now be involved with, a collection of inspiring innovations that have emerged from the IIG second call for ideas. C, Give What You’re Good At, GoodPeople, Women Like Us and Young Philanthropy represent a diverse portfolio of projects with one common ambition: make it easier for businesses and their employees to connect with impact to the causes that they care about.

Nesta is delighted to be working with Young Philanthropy. Its model introduces young professionals between the ages of 21 and 35 to a career of giving and develops their potential as leading philanthropists. The foremost initiative is the YP Syndicate that enables these young professionals to pool their money, time and skills and invest in compelling charity projects, with the matched funding of experienced philanthropists.

Give What You’re Good At is an online platform gaining significant traction from all quarters. It matches professionals who want to give and share their skills with ambitious non-profit organisations that need them for less than five hours a week. Likewise, GoodPeople is an operating system upon which pro-bono and skills-based volunteering programmes can be run. It is a website and mobile technology that will closely match talented people with exciting opportunities to work with civil society organisations based on their skills, causes and location.

Women Like Us is a multi-award winning social enterprise that provides support to women in finding work that they are able to fit into family life. Its career swapshop will enable a sharing network and build social connections between mothers in London who need family-friendly careers. And most recently C, an online social marketplace for giving and volunteering, made possible by individual giving accounts which are funded in innovative ways. Individuals can give time and money to the charities and initiatives of their choice, using a personal ‘C account’ funded by money from government, employers and commercial product and service providers.

These platforms highlight a need and an appetite for new mechanisms and solutions to bridge the gap between the private and third sectors. We can learn a great deal from them, and we will assess their impact on addressing barriers to increased giving; stimulate their adoption and adaptation in different contexts, expand the variety of models and mechanisms that might bring closer working partnerships, as well as gaining deeper insights into giving practices by a younger generation of business professionals.

One immediate reflection is that all of these innovations enable a bottom-up approach: an opening up of the giving framework whereby employees are more empowered and rewarded for giving to the causes that they care about. This is an important development if on the one hand we want to coordinate the exchange of business capacity with community need, and catalyse increased and new forms of business giving on the other. Watch this space.

Through supporting the projects in the business giving portfolio and delivering a wider programme of activity (details to follow), one of the key questions that I will address is what effective infrastructure models can be identified that mobilise and sustain charitable giving by businesses at a local level? Our programme will endeavour to uncover innovations that answer that question, or at least propose new possibilities for a world in which businesses are energised and recognised for their contribution to the economic and social development of communities through transformational new approaches and cross-sector initiatives.

 

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Innovation in Giving

The Rise of Behavioural Insights

Jen Lexmond

For the last two years, the Behavioural Insights Team at the Cabinet Office has been working to apply insights from behavioural sciences and economics to a range of public and social policy challenges – thus taking many years’ worth of academic research and hauling it into the realm of practical application. Recently I’ve been to two events – one, the launch of the Behavioural Design Lab (a partnership between Warwick Business School and Design Council), and two, a recent Which? workshop exploring how to better ground regulatory policy in the behaviour of ‘real consumers’ – that suggest the approach is beginning to spread beyond government and into the territory of regulators, designers, and innovators. As part of the Innovation in Giving Fund, we are also interested in how to apply behavioural insights to better understand motivations and behaviour around giving and reciprocal exchange.

Taking the realm of economics as a way into this discussion, here our traditional understanding of human behaviour has been based on a theoretical model – people are conceived of as ‘utility maximisers’, where utility is understood as a function of consumption. In other words, decisions are based entirely on getting the most stuff for our money. This principle of human motivation is the underlying rationale for our entire economic system.

But when we look at real, human behaviour, it’s all the other stuff – time, mental exertion, social norms – that shape our decisions just as much. We function within ‘bounded rationality’ – limited by the amount of time available to us to make a decision, our patience to sort through complicated options and weigh up pros and cons, our ability to successfully defer instant gratification to make the best long-term decision, and the information that we have about the decision we’re making.

The problem is that our entire policy and regulatory system is based on the model, not the reality. It’s how the myriad of choices that the mass majority of us make have been dubbed ‘irrational’ and therefore ignored.

Two examples from the Behavioural Insights Team that I really like include:

Government subsidised insulation in attempts to incentivise more people to insulate their lofts. According to ‘rational choice theory’, people should have taken up the offer. But no one did. Why? It’s not that people didn’t want to save money (not to mention do their bit to protect the environment) but more than that, they didn’t want to go up to their lofts and spend hours clearing out old boxes in order to make room for the installation – it was just too much of a hassle. Under the current system, this would be considered ‘irrational’ behaviour, and hence not captured in the model. But in basing a policy in a genuine understanding of human behaviour and motivation, new solutions can be found. In this case, it was designing an installation service that included a complimentary clear out of your loft and delivery of unwanted goods to the charity shop. Suddenly, the take up rose significantly.

Another great example is the way that social norms and peer pressure shapes our decisions – another area entirely unaccounted for by rational choice theory. In pushing people to complete their tax returns, reminder letters are often sent out, and often ignored. But in a new approach letters were sent out that stated the percentage of people in your neighbourhood/county/city who had already completed theirs. In seeing that the majority of your neighbours and peers had fulfilled their responsibility, people were compelled to take action. The desire to stick with the herd, and not be the odd one out, is strong. Communicating this information to others had a significant and sharp impact on number of completions, saving huge amounts of money.

In the separate, but related, field of charitable giving, we see that human behaviour is governed not just by a desire to make the biggest impact with a donation or volunteered time, but also a desire to forge and develop meaningful relationships, build our sense of identity, share with others, win a reward, or just have fun. A couple examples of the behavioural insight approach being used in practice in this space include:

  • Brixton Pound, New Economics Foundation and Dr David Reinstein at the University of Essex are testing out how the use of a complementary currency and different incentives can increase donations and local giving. Called Payroll Local, it takes an experimental approach and draws on insights from behavioural economics.
  • Professor Peter John at University College London are using RCTs to test what mechanisms are effective in recruiting volunteers here in the UK to support a variety of different causes, from assisting older people in their homes to reducing bullying in schools.

And we’re always on the lookout for more opportunities to use behavioural approaches to test out and build our understanding of the most effective ways to increase giving – so keep watching this space.

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