Blockchain for measuring social impact: Socialsuite a first mover
If 2017 taught us anything, it was that blockchain has now well and truly penetrated mainstream consciousness.
As we realise that blockchain technology has the potential to revolutionise everything from billing systems and contracts to supply chains and even electronic medical records, it becomes clear that Bitcoin is really only the tip of the iceberg.
Melbourne-based technology platform Socialsuite is one of the latest private companies to recognise blockchain’s strong potential for disruption – both for the financial space and the broader social one.
Socialsuite has partnered with IXO, which uses a blockchain protocol to deliver some of the world’s first blockchain smart contracts for funding based on verified social impact.
Integrating smart contracts with impact measurement, the partnership is currently running a smart contract pilot in Australia.
The Australian market alone for impact measurement solutions is AU$268 million, while the global market amounts to some USD$12.5 billion.
Socialsuite is a SaaS platform with a digital marketplace of validated impact measurement metrics that helps not-for-profits and community service organisations measure and report on the outcomes and impacts of their services, improving service delivery and securing further funding.
It also provides solutions for government, philanthropic and corporate funders to report on the effectiveness of their investments in social programs and community partnerships.
The following video indicates how the platform works:
Socialsuite’s technology is currently used by forward-focused organisations across Australia, the UK and Canada, with customers including Australia Post, YMCA Victoria, STREAT, Global Sisters, and Youth off the Streets.
IXO, on the other hand, is the world’s first blockchain protocol for impact measurement, leveraging blockchain technology to optimise sustainable development impact. It’s partnered with UNICEF, Innovation Edge, and Singularity University Venture.
Using the IXO protocol, organisations and funders can use a decentralised impact exchange to create verified impact claim – essentially, ‘proof of impact’.
This proof can be used to access social impact bonds and government subsidies, driving down the cost of evaluation. The data from these impact claims becomes a part of a global impact ledger, an open data commons that organisations, governments and researchers can access to make informed decisions and optimise impact initiatives.
Social impact investing: a changing climate
Global funding systems have been undergoing a major shift.
Over one trillion US dollars is invested every year on social impact projects supporting the UN’s Sustainable Development Goals:
Funders are increasingly demanding better reporting on the effectiveness of their capital, alongside trusted data on sustainable development impacts.
Socialsuite was created in response to this movement towards accountability in social spending, as well as the emergence of innovative financial instruments like social impact bonds, impact investment and social outcomes procurement, which have increasingly replaced more traditional funding methods such as grants.
Impact investing is steadily gaining traction in Australia. A 2016 report by Impact Investing Australia estimated the value of the Australian impact investment market at A$32 billion, citing private equity, venture capital and ‘pay-for-performance’ instruments as the sector’s most frequently used vehicles.
The most common type of these pay-for-performance instruments are best known internationally as social impact bonds, an innovative approach to financing social service programs.
Essentially, a social impact bond is a contract with the public sector in which a commitment is made to pay for improved social outcomes that result in public sector savings.
A number of institutional investors, including HESTA and QBE Insurance, are already supporting the developing social impact bond market, and Australia’s three largest banks – Commonwealth Bank, Westpac and NAB – have worked on assembling the structures.
Blockchain for social impact
Building on this innovative approach to funding, Socialsuite’s partnership with blockchain protocol IXO is about optimising – and precisely measuring – global impact.
But how exactly does blockchain fit in here?
According to IXO’s Anne Connelly, the blockchain community itself has a deep stake in social impact.
“There has always been a theme in the blockchain community around the technology’s potential to help the world’s most disadvantaged people,” she writes.
“Even the sector’s most basic implementations are poised to have a significant impact on populations that have been chronically underserved by their governments and the private sector.
“But when it comes to true impact work, whether social, environmental, health, or otherwise, complex problems require complex solutions,” continues Connelly.
For Connelly, this is where IXO’s use of blockchain to achieve the UN’s Sustainable Development Goals come in.
Bearing this in mind, blockchain technology is the natural next step for Socialsuite’s impact-focused technology. This latest move integrates smart contracts with impact measurement, and it is generating considerable interest globally.
Smart contracts for funding
The partnership is developing a smart contracts program that will be trialled by YGAP, a non-for-profit development organisation with a self-described “innovative approach to poverty alleviation”.
YGAP will be trialling the integrated technology, managing the release of subsequent funding tranches via blockchain smart contracts, which will be contingent on verified impact being achieved.
Socialsuite managing director, Dr Clara Ong, said: “Our entry into the smart contracts space is very exciting, especially if the global trend of financial instruments based on verified social impact continues on to become mainstream.”
“We are extremely well-positioned as a first mover. We are actively seeking program funders who want to discuss the application of our technology.
“The IXO protocol is backed by a world class team of blockchain experts and we are excited to explore the possibilities that combining our technologies can unlock,” Ong continued.
IXO founder, Shaun Conway, said: “We are excited to work with Socialsuite and look forward to growing our collaboration.”
Socialsuite is also currently negotiating running smart contract pilots with an impact investing fund, as well as some ASX top 20 companies.
How it works
The IXO protocol enables the creation of verified impact claims. Integrating with Socialsuite, an organisation can create an impact claim, detailing the impact work it has achieved. When the claim is verified by an evaluator, it becomes a critical source of data stored in the global impact ledger.
This decentralised data store will enable funders, organisations, researchers and individuals to identify gaps in services, spot and scale effective programs, and ensure maximised impact in undertaken projects.
The IXO protocol combines several key blockchain technologies including Ethereum, Sovrin, and BigChain DB.
Combining public and public-permissioned networks ensures that the most effective system can be created, while at the same time protecting the integrity and privacy of the data.
Offering significant benefits over traditional methods, the technology is safe, secure, anonymous and trustworthy. It can also be used by organisations of any size, program funders, governments and impact investment funds.
Ultimately, if successful, blockchain smart contracts could significantly accelerate the implementation of financial instruments for more effective social spending management – and this would have intriguing implications for both the financial space and the social impact one.
NB: Socialsuite is a related entity related entity of S3 Consortium Pty Ltd as defined in Section 9 of the Corporations Act 2001.
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