Social Impact Bonds – Wave of the Future?

President Obama’s new budget includes an innovative $100 million test program that can have profound effects on the social services world.  Social impact bonds combine performance-based payments and market discipline to overcome barriers to social innovation and encourage investment in cost-saving preventive services.

First tested in England on a prison recidivism program that has yet to produce measureable results, these bonds invite investors to put up money that will run privately managed social programs.  If the programs produce the quantifiable results anticipated in the program design, the government will pay investors back their original investment plus interest and performance bonuses.

As the Baltimore Sun reports these bonds have “the makings of a rare public policy trifecta—good for taxpayers, good for users of social services and good for private investors.”

The program creates opportunity for social service agencies while it challenges them on several fronts. First and foremost, agencies need to assure investors that they can bolster their evaluation methods to produce real outcomes, not just outputs.   That will mean developing criteria to demonstrate success and adopting more stringent evaluation methods that previously have been difficult to develop and expensive to achieve.

Service providers also must convince the private investors that their program model and management team are likely to achieve the performance targets. Major foundations are likely to find merit in these programs but will individual investors see the merit and take the risk?

The success of these bonds also rests on the ability of agencies to collaboratively define the treatment population so that the results will be real and measureable, producing the right return on investment for sponsors.  And at issue will be definition of what will happen to the chosen population if the programming fails.

These bonds could be the most innovative way to shape the way services are provided to those in need in the next decade or they could be a flash in the pan.  What do you think?

Ignoring a problem won’t make it go away

Too often, companies ignore a problem and hope it goes away: embracing denial which gets them in deeper trouble by minimizing issues or obfuscating the facts.

But how does a company respond to facts that are made up? Activist lawsuits can be especially challenging when brought by marginal entities on specious grounds. And significant reputational damage can be done in very short period of time.

A recent lawsuit against a global fast food restaurant claimed that its beef was lacking in the meat department. Illegally so. The lawyers for the plaintiff claimed that a restaurant beef offering should be held to the same USDA standard as the beef sold in the meat market of your grocery store. The problem, obviously, is that restaurant entrees are made flavorful with other ingredients that aren’t part of the grocery store product.

The suit was marketed to the national media by the plaintiffs and got traction with consumers, which meant the company had to spend millions of unbudgeted funds to explain in detail why their product is flavorful. The company developed a multi-faceted, fact-filled response, including full-page newspaper ads, a You Tube video and a full-range social media campaign. Some foodie websites  that took up the topic mocked the suit and its complainants.

And the crème de la crème is an offer by the company for free product, removing any perceived barrier to trial in the most effective manner possible.

The company’s response demonstrates a strong commitment to their product and a willingness fight accusations with facts blow by blow.

When Mother Nature gives you a blizzard…

Chicago is still digging out from one of Mother Nature’s reminders that we aren’t in control of everything: 20 inches of snow and 50 mile an hour winds, followed by subzero wind chills.  Making something positive out of those brutal conditions is a beautiful thing to behold.

And to see a great example, head on over to the Lincoln Park Zoo’s website.  The Zoo’s response to the storm is featured throughout the site, from a cover story describing the Zoo’s preparations and response, to a beautiful slide show of the snowy Zoo, commentary by animal care staff and a letter of thanks to the Zoo staff from Kevin Bell, Zoo President.  The Zoo faced a challenge and used its response to reinforce its core messages of conservation and animal care.

Who else has turned The Blizzard of 2011 into a positive?

Pork, milk…and now baby carrots

Following in the impressive footsteps of “The Other White Meat” and “Got Milk”, a group of baby carrot producers are launching a new campaign to position the tiny bits of carrot as junk food.

“Eat ‘Em Like Junk Food” launched in Cincinnati and Syracuse and gradually will go nationwide.  For Halloween, the carrot farmers are producing Scarrots, specially packaged just in time for trick-or-treating.  While we lament the need to call something junk food to attract youthful attention, replacing less nutritious snacks with carrots can’t be all bad.

Kineo advocates a campaign approach to marketing and communications and the carrot producers clearly agree.

Their “Junk Food” campaign includes TV, print, billboards, special packaging reminiscent of snack food bags, and a strong social media campaign.  The campaign website, babycarrots.com, has a carrot-crunch-powered video game, music, random carrot characters (we like the Viking), a tease for the new TV spot and links to YouTube, Facebook and Twitter. Of course, carrot-appropriate puns abound (Snacktacular TV).  All brought to you by – are you ready? – A Bunch of Carrot Farmers.

Nonprofit Jobs

Interesting to note that the nonprofit job sector grew last year in the middle of this recession. We are sure the reasons cited in the John Hopkins University study for this growth are valid but it left us wondering how much of that growth is brought on by for-profit employees thinking nonprofits offer better job security than their previous employment.  Nothing like a job loss to prompt consideration of doing good rather than staying in the for profit sector. Even though the wages are likely to be lower, a job helping others or society can soothe the sting of no longer making what you used to make. It means high quality talent for but the question remains will that talent deliver improved results. What do you think?

Nonprofit Compensation

A recent Chicago Tribune front page article revealed the CEO salaries of the top Chicago museums and, while it didn’t say so directly, it implied that the salaries are unusually high and out of line with where they should be.   This is one of many articles that frequently pop up about nonprofit salaries and frequently they take issue with the level of compensation.

What they rarely do is compare the size, market and budget of the nonprofit organization to equivalent for-profit corporation CEO salaries.  Because these leaders work in the public sector, it seems to be assumed they should be willing to accept lower salaries because they are quasi-public servants who get psychic income from “doing good”.

It is time for reporters who delve into nonprofit executive salaries to get smart.  If they focused the same amount of research time investigating the demands of a museum CEO job, we might find that these salaries are not excessive and are in line or under those of their corporate counterparts.

The Impact of the iPad

Will the Apple iPad change the way you are marketing? Most likely.

Think about it. Just when marketers are totally embracing quick hit social media—YouTube, Twitter, Facebook—there comes along a medium that encourages more laid back engagement much like newspapers did.

Content delivered on the iPad can be lengthy, in depth and detail oriented—not because the page is bigger (although that helps)—but because it is designed for more leisure communication. The iPad encourages book reading setting a pattern for its use as an entertainment medium. Users are likely to view it and use it in a more relaxed environment, not as on-the-go communication like cell phones.

For marketers, it means a change in course to develop longer, more compelling information that fits the timeframe that iPad users are likely to spend with their new gadget. Instead of 140 characters or less for Twitter, now the challenge is to develop apps and content for this new medium that engages an audience in a more leisure type setting.  The iPad will create a whole new generation of couch potatoes. But instead of remote controls in their hands, they will be embracing a new kind of gadget that gives them hours of pleasure, not minutes.