Generational Capital

The alarm clock wakes you up and slowly realise it’s a Monday, the start of another week. You get out of bed, get dressed as quickly as you can and head out of the door. No time for breakfast?—?there isn’t anything in anyway?—?you arrive at the place you’ll spend most of the next five days. Luckily you’re in time for breakfast and see the first familiar faces of the day. Without breakfast, you would be waiting until midday at the earliest before you’ve had any food today.

Now imagine this if you’re eleven years old.

This is the morning for hundreds of thousands of children across the Western world, and in the global context they are the lucky ones. Where I live, Camden in North London it is estimated that 36% of children live in poverty. Over in Tower Hamlets in East London that figure is 49%.

Many of these kids don’t see their parents in the morning because their parents are already at work. Many schools realised that poor academic performance was due to the fact that the kids in their classrooms hadn’t eaten since dinner the night before.

Breakfast Clubs have sprung up in schools and communities across the UK and USA in the last decade. They are much needed, and for many children they are vital.

But Breakfast Clubs address the symptoms rather than the root causes of disadvantage.

Some social problems are so entrenched, so core to disadvantage, unemployment and economic independence that they weigh down all isolated fragmented attempts to address their symptoms and ensuing problems.

These issues are the anchors from which individuals, families and communities struggle to break free of over successive generations.

We need a new approach to untether families and communities from their own recent history and enable them to cast their gaze towards a brighter future.

There is a need for a re-think in how we use financial capital to address some of the most fundamental social needs of our time.

Some of the most interesting approaches to organising capital I’ve come across in the last few months are attempting just this:

- Detroit’s grand bargain and ongoing commitment from the Ford Foundation to tackle inequality with substantial, long-term investment.

- $100 million dementia venture capital fund set up by The Department of Health, the charity Alzheimer’s Research UK and six pharmaceutical firms GlaxoSmithKline Johnson & Johnson, Biogen, Eli Lilly and Pfizer, and Japan’s Takeda.

- North Camden Zone being developed by the Winch from the Harlem Children’s Zone approach.

The change we want to see needs to be the anchor for the design of the system.

The anchor needs to be a long-term approach.

Thinking in terms of a generation.

As in: let’s eradicate child poverty in London within a generation.

EMERGENT PRINCIPLES

In designing for this scenario I think we also need to try and understand some of the principles that will allow flexibility, entrepreneurship, innovation and collaboration.

- There needs to be enough freedom in the system to allow for innovation.

- There needs to be the integrity and accountability that come with a transparent but adaptable framework of impact measurement.

- There needs to be multiple funders committed to the long run?—?with a willingness to put up initial capital in the knowledge that the more people involved in the fund will de-risk for everyone.

- Shared back office function to create as much space for the expert practitioners to focus on the most important priorities of their work

- Individual and shared KPI and outcome incentive model to encourage partnership and collaborative working amongst the organisations being invested in.

Different phases of organising capital.

- catalytic phase about creating a high number of potential activities

- replication phase about further investment into the most successful initiatives

- sustaining phase that seeks to build out long term operating models and stability of impact

We need to allow for being able to accelerate certain initiatives proven to work, maintain the pace of certain initiatives whilst we gather evidence to their effectiveness, and to decelerate or stop certain initiatives that aren’t offering a good social return for the investment.

Create a fluid system that allows for flexibility and agility in how we organise people and capital for social change.

We need to remove the rigidity of current capital organized for social change.

- restricted funds

- existing companies with 3 year track record

- governance in the form of paper based audit approaches and static, infrequent committee approach

The urgency in this system is in using capital efficiently and effectively, so that when something isn’t working capital is removed and utilized elsewhere.

By taking care of the operations of the innovative projects / initiatives / teams we would allow those working directly with users / beneficiaries

We should come from the perspective that there is enough capital to drive systemic social change, and that there is the talent in abundance in our communities and wider society to take on the hard task of addressing the interconnected web of disadvantage that people face every day.

A blended investment approach of Generational Capital might be just what we need for renewal in our communities.