Позитивные изменения. Том 2, № 2 (2022). Positive changes. Volume 2, Issue 2 (2022)

According to her, the underdeveloped social investment mechanisms and the difficulty of assessing the effectiveness of social spending are the main constraints for the development of public-private partnerships in achieving the goal of positive social change. The preparation of the contractors, namely socially oriented non-profit organizations and social entrepreneurs, to successfully address such large-scale tasks also raises concerns. Given the potential for the development of social impact projects in Russia, the term of the pilot testing of this financial instrument should be extended, as for now it is defined until the end of 2024.

Given the pilot nature of SIB implementation, its mechanics need to be formalized and substantiated, says Vladimir Vainer, director of the Positive Changes Factory.

Expansion would rely on the regional authorities being ready to take action that is different their traditional work formats.

"This starts with the actual project passport submitted for consideration. Right now, it barely details the outcome evaluation methods. The main focus goes to the most formalized external data of immediate actions and immediate results. The reasons for this are clear, but the work to improve documentation is not enough. The reference to an independent examination and evaluation of projects based on the results, without detailing the mechanisms of this evaluation, allows only the official statistics to exist, without any research before and after, or specific development to match the project monitoring methods", Vladimir Vainer explains.

Secondly, we can distinguish problems at two levels at once. At the level of the implementation efficiency, it should definitely focus on stimulating the growth of investment, but now there is more reliance on the registration of existing CSR programs of the large corporations, which are invited to move their existing programs into the new format.

"On the other hand, like any investment, SIBs must be appropriate for the market conditions — this applies to the conditions of return on investment, which are dependent on achieving the social target, unlike in ordinary investment contracts. Currently, this question is not raised at all", Vladimir Vainer notes.

The concept of "social impact" does not currently exist in Russian law, which also imposes a number of restrictions.

"There are always questions with its definition, measurement, its stretch in time. If you think in terms of "customer — contractor — subcontractor", there is a service provided and the result of that service. Since it is not defined in the Budget Code of the Russian Federation or in any bylaws, no one understands how to work with this, everything is quite complicated. SIB projects are usually expensive, they are more difficult in implementation and achieving social impact than ordinary social projects. In each specific case, the risks of the project participants must be insured, which is especially difficult in case of large investment amounts. These difficulties will likely prevent SIBs from becoming really widespread", says Yakov Samokhvalov, General Director of the Yugra Center for Civic and Social Initiatives foundation.

Here is an example. All social projects are aimed at improving the quality of life of their beneficiaries, in one way or another. Take the area of smoking prevention. Let’s say the project authors claim that 300 students participating in the project will stop smoking after five years. That is, the social effect will be achieved over a span of five years. But from the point of view of the Russian law, the project should be closed and reported on after one or two years in implementation. Also there is no norm that would allow a social project to be recognized as unsuccessful if the social effect is not achieved, the technology does not work, or the results are affected by some external factors, like deteriorating social and economic situation. You can go ahead and criticize the project, saying that there is no proof that the respective social effects were achieved as a result of the project. If the targets are not reached, however, then the supervisory authorities will certainly have questions as to why it happened.

Olga Balabkina, Deputy Chairman of the Government of the Republic of Sakha (Yakutia), emphasizes that once a SIB project is successfully implemented, it can be repeated in other territories. Or, by testing how a particular innovation works, you can extend it to a new project to reach more beneficiaries.