Instead of just monitoring performance, social investment empowers charity leaders to make the best decisions with their funding.
Let’s look at a powerful example involving housing and mental health in New Zealand.
The following graphic illustrates the profound impact housing can have on individuals. It shows the experience of a group of 120 people with serious mental health conditions interacting with the New Zealand hospital system.
The ‘before’ picture shows the number of nights individuals spent in hospital over a one-year period, each line represents a different person’s experience. On average, individuals were hospitalised for 122 nights annually with some people staying over 300 nights.
The ‘after’ picture shows the impact of moving these individuals into tailored, long-term housing with a specialised Community Housing Provider (CHP). The average number of hospital nights decreased 92% from 122 to 10 and the reduction remained constant over the next five years.
By housing these 120 people, we estimate the local former District Health Board (DHB) was able to free up $4.9 million of hospital capacity. Other social benefits from the support of CHP include reduced addiction and offending and improved physical health.
We estimate a social return on investment for New Zealand of $4.50 per dollar invested in the programme.
What made the difference?
This housing model has a few core elements on paper, though of course implementation in practice has taken years of honing through experience by the housing provider and hospital staff:
⦁ Tailored housing - designed to meet the needs and priorities of the tenants, ensuring privacy and accessibility;
⦁ Flexible tenancy management - proactively offering more support when needed, especially if a tenant’s mental health is declining;
⦁ Smooth referral process - hospital staff understand the population that the community housing provider can best support and have established a seamless referral and handover process;
⦁ Sustainable funding - the model is funded through an Income-Related Rent Subsidy funded by the Ministry of Housing and Urban Development (HUD), with significant top-up funding from Te Whatu Ora for additional support.
So, what’s next?
With social analytics, metrics often generate more questions than answers.
‘Feedback thinking,’ a core principle of social investment, involves using data to launch an ongoing process of inquiry to inform future decisions. Our next three questions for this analysis are:
⦁ What was the living situation of these tenants when they were spending an average of 122 nights a year in hospital? Anecdotally, we understand this to be inappropriate temporary accommodation or homelessness.
⦁ Bed nights stayed low even after many tenants had left the community housing. Where did they go next and why did the benefits persist?
⦁ How many other Kiwis are spending a third of their year in hospital when they could be spending it at home?
What broader lessons can we draw from this example of social investment?
It’s no secret that it’s difficult to get agencies which are funded on annual budget cycles to invest in long-term outcomes when the benefits of that spending primarily accrue to another agency, and take many years to kick in.
This analysis was possible because the local DHB shared bed nights data with the housing provider, based on user consent. This kind of data sharing can lead to valuable insights and better outcomes.
For a deeper dive into the housing-hospital connection, check out Dr Nevil Pierce’s work, which guided our analysis.
Jarden Wealth and ImpactLab have a longstanding partnership. The ImpactLab and Jarden Wealth report, titled Charitable Sector Insights: An introduction to Social Return on Investment is available here.
Jarden Wealth Limited is an NZX Advisory firm. A financial advice disclosure statement is available free of charge at jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/. Full disclaimer available at https://www.jarden.co.nz/disclaimers/wealth-management
