Позитивные изменения. Том 2, №4 (2022). Positive changes. Volume 2, Issue 4 (2022) - Редакция журнала «Позитивные изменения»

In the traditional approach to financing social services, the state either advances the financing for the provision of social services as per given standard, or covers the costs actually incurred in providing said services. The “pay-for-success” approach brings flexibility into the adjustment of the plans of social impact project activities, based on external factors and established project practices, to achieve social impact.

Focusing on the mechanisms and technologies of social work implies that social impact projects do not involve creating any infrastructure, unless required by the work technology (for example, facilities for organizing assisted living for the disabled), but even in this case, it should not constitute a significant part of the project.

An important feature of social impact projects is that each project is aimed at developing a unique mechanism and work technology in the social sector, intended to improve the lives of the residents, which can be further replicated and scaled (after independent evaluation confirms their effectiveness). The goal of each project is linked to the strategic development objectives of the state, and the social effect and target indicators are a tool to measure and confirm their effectiveness.

Thus, social impact projects allow the state, businesses and non-profits to jointly offer effective solutions to improve the lives of the local residents, including by means of:

• testing new modern mechanisms and technologies for the social sphere, which require less government spending at all levels while achieving comparable and even greater social effects;

• conducting a comprehensive assessment of the results achieved and the approaches and working mechanisms developed for further replication and scaling of the most effective solutions;

• increasing the efficiency of government spending by deferring the budget expenditures and conditioning them on the achievement of the intended social effect of the project, based on an independent evaluation;

• improving the quality and accessibility of public services, taking into account the needs of the population;

• attracting private investment to the development of the social sphere on a repayable basis;

• development of the non-governmental sector in the social sphere, through the ability to scale its activities and develop competencies (including project management) in cooperation with the government agencies, commercial organizations and development institutions.

Diagram 1. Social impact projects: project implementation mechanism

WHY DO WE NEED A SOCIAL IMPACT PROJECTS OPERATOR?

Implementing a social impact project requires competencies in public finance, strategic and project management, as well as an understanding of the specifics of the social sectors, including the following:

• working out the parameters of the project passport, including analysis of the social problem and establishing its relationship to the strategic objectives of the region;

• elaborating the social effects and targets as the project success criteria;

• producing a financial and economic feasibility study of the project, based on the expected social effects;

• agreeing project parameters with all stakeholders;

• drafting regulations and agreements related to the project implementation, including those that provide for collecting information to monitor the project implementation;

• searching for a potential project organizer, implementing partner.

Most projects abroad are carried out through an intermediary that provides technical, legal, financial expertise, assists in structuring the project as a social impact project, elaborates the financial plan for its implementation, raises funding for the project and performs other functions. Often different organizations are responsible for different aspects. Some project descriptions feature information about seven different intermediaries involved in their implementation.

Government Resolution No. 1491[51] provides for the involvement of a project operator, which provides consultancy support, monitors project implementation and ensures an independent evaluation of the achievement of social effect. The Concept for Improving the Efficiency of Budget Expenditures in 2019–2024 also provides for the involvement of Russian development institutions in the implementation of new funding instruments (including social impact projects)[52].

Within the framework of the pilot testing, it is recommended that the constituent entities of the Russian Federation engage VEB.RF as the operator. The operator's participation allows the constituent entities of the Russian Federation to “fine-tune” the tools of social impact projects, while VEB.RF, as the operator, can gather best practices of their implementation for the further development of the tool. The operator also monitors projects and takes measures to curb detected risks. At the end of the project implementation period, the operator engages an organization to conduct an independent assessment of the social effect achieved, which is the prerequisite for paying the subsidy to the project organizer.

WHAT WAS ACCOMPLISHED BY THE END OF 2022?

By the end of 2022, social impact projects were 2/3 of the way through pilot testing scheduled to start from 2019 through the end of 2024. By this point, ten constituent entities of the Russian Federation became actively involved in the design, launch, and implementation of social impact projects, and almost half of the constituent entities expressed an interest in implementing such projects.

Summarizing the results of almost 4 years, the following key achievements can be noted:

• Regulations on the Organization of the Pilot Testing of Social Impact Projects by the Constituent Entities of the Russian Federation in 2019–2024 (Government Resolution No. 1491) were approved, which streamlined the basic requirements for the implementation of social impact projects and launched the pilot testing;

• ten projects were launched in seven constituent entities of the Russian Federation, in five social sectors (education, social services, social protection, health, and employment), with the total investment of 385 million rubles; 419 million rubles were allocated as subsidies from the regional budgets;

• three projects were completed in 2022: one in the Republic of Sakha (Yakutia), in the field of education; and two more in Primorsky Krai, in healthcare and social protection. The total investment in these projects was 106 million rubles, with grants amounting to 114 million rubles. All the projects were deemed a success, as the intended social effect had been achieved;

• social impact projects have gained international recognition: VEB.RF received two ADFIAP