Entrepreneurs ask for “standard rates” for social services

04.03.2020

The future of social investment and the difficulties faced by social entrepreneurs was discussed at the State Duma on 3 March at a preliminary session of the Expert Council for the Development of Social Entrepreneurship.

Global experience of impact investing

Impact, or social, investment, is a monetary instrument that promotes social change which has practical application worldwide, according to Ekaterina Besshaposhnikova, Head of Education Programmes at the charity Our Future. It has studied other countries’ experience of social investment and found a major drawback in its inability to measure social impact on a universal scale. Despite this, the share of green bonds, the most popular impact assessment tool, was 230 billion US Dollars last year.

According to Besshaposhnikova, countries use legislative support to develop the market. For example, they allow pension funds to be used to invest in the social sector, use funds from inactive bank accounts, draw up special organisation laws to protect investors from risk, as well as developing rating and certification systems for social enterprises.

In order to promote social investment in Russia, the charity has recommended encouraging investment in roubles, lowering re-financing rates, limiting financial speculation, adopting a law on social investments and the introduction of tax benefits for impact investors. The charity is also advocating the development of a State methodology for measuring social impact and the introduction of State guarantees for social investments.

Public/Private Partnerships (PPP) – the pros and cons

“PPP is where the State and businesses sit down around the negotiating table to decide what preferences the State should provide to a particular scheme, what proportion of an investor’s costs it can cover so that a scheme which it cannot fully cover financially, and which is not of interest to a business because of the protracted reimbursement process, becomes attractive to the investor”, explained Natalya Komarova, Deputy Chair of the Committee for the Development of PPP and Business Affairs and of the All-Russian Organisation of State-owned Companies, Business Russia.

Alexey Mavrin, an entrepreneur and founder of the Opeka assisted living residences for the elderly, considers PPP to be an excellent tool but fears it could be overlooked if there’s a fall in the price of social services. The role of tariffs is particularly important to the running of Mavrin’s residences as they vary from region to region. If, say, in the Moscow region, the cost of caring for an elderly person is one rouble, in Moscow it would be twice as much for the same services.

There would be no need for PPP if there were “standard tariffs”, according to Alexey Sidnev, Chair of the NGO partnership World of the Older Generation”. He believes that in order to encourage social entrepreneurs to enter the market, officials need to give priority to the private sector and back up their words with deeds.

According to Sidnev, action needs to be taken to develop a financial social entrepreneurship model, as well as separating control and regulation of social service implementation, establishing a single standard applicable in every region and finally to make a clear statement on the actions of bogus groups instead of pretending they don’t exist, i.e. by introducing a system of licensing which makes it difficult for them to provide poor quality services.

Additional reports and presentations made by experts at the meeting can be found on the Experts’ Council’s website.

Source: https://www.asi.org.ru/news/2020/03/04/sotsialnye-uslugi-2/