Big lottery winners

Last week the organisation which awards money, generated from the massively popular UK National Lottery game, to good causes announced its priorities for the next three years. Given that BIG (the name of the grant-giving organisation) will have a cool £1.5bn to spend the potential to support good causes in Britain is immense. A lot of their priorities sound absolutely right – such as supporting good causes which focus on preventing expensive social problems in the first place. Yet, given the problems British society is struggling with at the moment (i.e. youth unemployment over a million) and the consequences communities absorb (i.e. the london riots) could there be the potential to do something game-changing with that substantial pot of money?

The way the money is spent is as important to society as what it is spent on and how much is spent. How does the money get from the hands of the lottery players to the good causes? Well at the moment 13% of every ticket cost is centrally collated and then distributed to a wide variety of good causes through the administrative organisation called BIG. State politicians traditionally have let BIG run their grant funding programs independent of government directions, which given the incentives for short-term popularist programs in the Westminster model is probably a good thing.

However, does the allocation of £1.5bn via appointed officials really engage society and strengthen the bonds and relationships within communities that we know are especially vital in times of economic hardship? Maybe, but I think there is a more effective way of allocating the money. Why not allocate the cash equally between the 150 top tier local administrations in the UK (equivalent of the 58 counties in California) for the next 3 years and then use it as a challenge fund for everybody aged under 25 to enhance their community? Rather than funds being allocated by officials, the local councillors together with local business partners could hold “dragon’s den” style sessions in the town halls to allocate the money.

JobCentrePlus and providers of the work programme together with local mentors from local businesses could encourage and support young people to develop pitches and implementation plans to put in front of the judging panel. Equally existing good cause organisations which currently rely of lottery grants may be forced to amend their business model so that they employ some more young people to make the pitch for them. Either way, there is real potential for the £1.5bn over the next 3 years to be focused on engaging and creates opportunities for young people to be active in the labour market through the spending system alone. Who knows maybe some young people will come forward with an awesome idea to ensure decent community support for the elderly living alone – a crisis that is now really biting across many local authorities in the UK as local service budgets become smaller.

Could state politicians make this happen? Yes, and it could be a popular move. However, the real question is is it likely to happen? The answer at the moment is no, due to path dependency. Many organisations are dependent of lottery grants – they do not want this funding stream disrupted when it is getting ever harder to raise money elsewhere. Equally one can’t imagine the grant-allocating officials themselves at BIG wanting to put themselves out of a job, regardless of whether the money could be allocated more effectively through a different mechanism – people have mortgages to pay first and foremost! Still, with a bit of imagination maybe the Executives at BIG could see an alternative business model where they act as on-call consultants with each council contracting an advisory service from them on the cost-effectiveness of local pitches and programs? Indeed, perhaps BIG should spin itself out as an employee-owned mutual and look to cash in on a potentially lucrative advisory service to lots of local administrations?!



Mind changers

Regular listeners of the BBC world service will know Claudia Hammond as the presenter of the weekly magazine show Health Check. However, she is also one of the most engaging psychologists around making potentially complex theories accessible to those of us who struggle with a Psychology 101 test! In London she has recently launched her new book ‘TimeWarped’ and in order to find out what it’s all about most people have already been enjoying the tests of their own time perceptions with the games on her website.

At the end of April Hammond presented a fascinating programme in her Mind Changers radio series focused on ‘Donald Broadbent and the Cocktail Party‘. Most people who know about this programme have already listened to the 30 minute broadcast. It looks at the groundbreaking research of Broadbent, the Director of the Medical Research Council’s Applied Psychology Unit from 1958 to 1974 who launched the cognitive revolution in psychology in Britain. With his innovative dichotic listening experiments, Broadbent gained a unique understanding of the ‘cocktail party effect’: significant information, such as our own name, intrudes on our consciousness, even when it’s embedded in auditory information we’re not apparently attending to.

There are some pretty neat dichotic listening experiments to play along with (make sure you listen through headphones!) on the show, and you soon learn that when different conversations are happening in different ears it’s actually quite hard to pick up the key messages. However, with a little bit of help from Hammond – notably to focus your attention on one ear rather than both – you can effectively tune in to key points and cancel out the background noise. Equally, subtle changes in the messenger itself has an impact such at the the pitch of the voice (essentially a women’s voice, as we know, is better than a man’s dulcet tones!)

Now, this got me thinking about public policy! In the UK and the US pre-teenage children are bombarded with loud and subtle commercial messages on a daily basis: drink sugary sodas to become as sporty as David Beckham, eat fatty fast food to be as cool as your dad, wear padded bras to be the next Britney Spears (seriously!), pester your dad to spend $100 on trainers that cost less than a $1 to make and will last less than 3 months, pester your mum to buy that cheerios cereal not just so you can have a sugar high on the bus while going to school but also a sugar low in time for the first maths lesson of the day. Brilliant! Of course, one parent’s obese, materialistic, hyper-active child with developing type II diabetes is also a shareholder’s dividend, a salesmanager’s bonus, a factory worker’s salary and a Government’s GDP growth figure.

Both the effective functioning of society and the state are currently dependent on mass consumerism, whether you like it or not. However, couldn’t the state help shape consumer demand towards products which are in the interests of society and citizens? Surely this would be a win-win as producers could also shift their production from sugary sodas to fruit smoothies and from crap breakfasts to nutritional ones in response to changes in consumption patterns. The problem is that – given current path dependencies of mass production and the mark-up that can be made from crap (i.e. refined sugars and hydrogenated fats) rather than the genuine deal (fruit and wholemeal products) – it is not in the interests of the producers to change their marketing practices – it’s much easier to socially engineer kids into thinking crap is good for them.

So, this brings us nicely back to the dichotic listening experiments Broadbent did. For those of us passionate about a stronger society, supported by the state, we need a way of getting children to focus on those messages which inform how they look after themselves, the people around them, and the communities they live in. Many children already get these messages from good parenting, but the state should help parents who have to struggle day-in-day-out against multi-million dollar commercial messages all aiming to socially engineer children to behave and consume in ways that are counter-productive to a stronger healthier society.

The state’s role remember is to support society. One of the ways it can do this, and help parents struggling to build resilience against ever-stronger commercial pressures, is to really think about the messaging kids receive in schools and how they receive it. In the UK schools are monopolised by teachers – their job is rightly to empower children with new knowledge and skills to learn. In the 21st century this is necessary but not sufficient to strengthen a liberal society.

In the same way commercial companies hire advertising consultants to sell a message, why can’t schools employ specialists in the dark arts of advertising to explain to kids how they are being socially engineered? In the same way David Beckham employs a nutritionist who would never dream of recommending high sugar drinks to further his sporting careers, why couldn’t schools employ specialist nutritionists to explain to kids the right sort of diet they need to achieve sporting greatness. While Britney Spears employs personal stylists, why couldn’t schools convince local hairdressers and make-up artists to share some their skills with the kids about how to enhance natural beauty (and self-esteem) themselves through creative thinking and having the courage to be original rather than paying for branded goods endorsed by a troubled singer whose body language on stage actually conveys a very sad, and ugly, inner-misery.

Perhaps the UK Treasury could encourage advertising agencies, nutritional experts and local beauticians to work with schools by either introducing a business rate discount or some conditional deregulation for those that approach and work with schools?! We know the opportunity for state institutions to strengthen society is huge, but increasingly challenging in a world of increasingly loud commercial messaging. However, by ensuring kids have the tools to focus on those messages which strengthen society the state can really support all those parents and teachers who are trying so very hard everyday, every hour to strengthen the next generation of society.

Psychology of proposition 29

At the recent science of doing good event at the stanford centre for social innovation Todd Rogers gave a fascinating talk on the psychology of voter turnout. Marguerite Rigoglioso gives a good overview on the CSI site which is well worth a read. Getting the vote out is not just an important issue for presidential candidates and political parties, it is fundamental to the state earning legitimacy (collective trust) from society. If people don’t participate in the electoral process – especially if there is a group effect – then those people and groups are effectively disempowered.

Rogers, in his talk, gave a whole range of useful and simple ideas for getting the vote out (from getting potential voters to commit to a plan to vote, to emphasising a positive norm around voting in a state) However, I was especially interested in a specific study from the 2010 election that Rogers cited looking at the importance of personal relevance and accountability. Rigoglioso notes this study in her post: researchers sent one group of potential voters a psychologically sophisticated mailing encouraging them to vote. Another group received the same mailing, plus in the top right corner a box saying: “We may call you after the election to talk about your voting experience.” Adding that box increased the effectiveness of the mailing in terms of the voting it stimulated by almost half.

That’s a pretty impressive impact! On June 5th voters in California will be asked to make cigarettes more expensive. As outlined in the Examiner today Proposition 29, would raise the state’s excise tax on a pack of cigarettes from 87 cents to $1.87, with the revenue to go toward research on cancer and other tobacco-related diseases. It would go into effect in October and is expected to raise about $735 million in the first year. That is a lot of money, yet I’m not convinced of the personal relevance is being maximised in the design of this proposition. There are more innovative designs of such a fund that could more actively engage and interest society in this proposition – designs which would give the state more legitimacy for this intervention.

Firstly, rather than the $735m going to cancer research by default (which is effectively a californian subsidy for federal & overseas cancer research programs), the fund could be used as a challenge fund for Californian citizens to do something to enhance social bonds and relationships in their own neighbourhoods. Individuals, families, blocs or whole neighbourhoods could collaboratively bid for some seed funding to set up some community activities. Surely this would be more salient to the everyday lives of California, especially those that are at less risk of lung cancer because they don’t smoke. However if Californians don’t bid for the bucks, and there is a large pot of money left over then that – by default – could go cancer research programs. So effectively Californians get first choice on spending, but if society doesn’t actively step up to the challenge by default the unused money could then go to the federal and overseas cancer research programs – a pretty good incentive for Californian communities to get active with their bids then!

Secondly on the campaign mail outs currently encouraging Californians to support proposition, there could be a box in the top right hand corner saying “We may call you after the election to talk about your voting experience and your priorities for spending the $735m fund to strengthen your community.” Based on Rogers research, this should both encourage more people to vote for the proposition as well as shift citizens perception from being a passive recipient of the newly generated fund to an active player in how the funds are spent to strengthen bonds and relationships in their community. Such a re-think of the design of proposition 29, together with a few tweaks to the wording of the campaign mail outs, has the potential to significantly strengthen Californian society. Let’s hope the State reads Rogers research soon!

The state’s new few

A book called The New Few by Ferdinand Mount has recently been launched in London and has gained quite a bit of media attention in the UK. The central premise of the author is that over the past 30 years power and wealth in Britain have “started to migrate into the hands of a relatively small elite”. Given that Mount was himself part of a westminster political elite (he used to be a key adviser for Prime Minister Thatcher in the 1980s) he could be at risk of being seen as a perpetrator rather than a reporter of such a trend. Yet, this would be wrong – Ferdinand Mount is one of the most impressive thinkers of his generation, and a person who is genuinely committed to a state which strengthens society. Policy makers in the UK should always read, when Mount writes.

The concentration of wealth and power is bad for society according to Mount – it disconnects the powerful few (‘the oligarchs’) from the many thus threatening not only the ‘good name of capitalism’ but the ‘integrity of our democracy’ (I think post 2007/8 such givens are already threatened across the globe!). Mount makes some excellent points about the need to enhance shareholder power in businesses to hold management truly accountable for their performance. However, his proposition about the ‘hollowing-out of public life’ is something that has increasingly being accepted by the political classes over the past decade. Power has become “seperated from the electoral process” as decisions are taken at a remote level and society therefore concludes that they “can have little influence, whether as party members or voters.”

Mount gives this neat example of how decision making in the UK is increasingly done for society, rather than by society – the intrusion of the big state so to speak. “The example of High Bickington, a village in Devon [a county in south west England], which had put forward a scheme to build some new housing, a civic centre and a school. Although supported by the local community, the district and county councils, the scheme was ultimately killed off because of the intervention of a regional quango [organisation of appointed permanent officials] – the unelected Government Office for the South West.”

We know that such centralisation and concentration of power in the state sucks the dynamism and entrepreneurialism out of society. Communities are forced to rely solely on the state, and fail to maximise the mutual support of people helping each other. Such state power atomises citizens, rather than brings them together to collaborate, weakening the very social bonds and relationships that are the essence of a stronger society. For the past two years the current UK government has tried to pursue a policy idea known as the ‘Big Society’ – a radical agenda for a ‘post-bureaucratic age’ to put more power in the hands of people. This ‘people power’ narrative is exactly the sort of radical approach Ferdinand Mount argues is required, yet by all media and society stakeholder accounts the Big Society has failed to have the transformational change those of us involved with it hoped and expected it to have.

There are many reasons for this, and if a post-mortem does have to take place there will be lots of stories to tell from institutional weaknesses (the failure of the state to drive the transformation required) through to the lack of a clear narrative (nobody in the UK understands where the country needs to get to, and how it can get there over the next 10 years – hence the cynicism within UK society coupled with the hunger for hope and optimism).

I was sent an email yesterday about a blog post on the UK’s Guardian newspaper website that listed all the Big Society agenda is delivering on the ground for British people really suffering with a dire and worsening economy. This is the uber-frustrating part: the Big Society agenda should never have been about a laundry list of new state funds and pilots – it should have been about a transformational change in the relationship between the state and society. Nobody is going to knock an extra $20m fund for supporting voluntary sector organisations currently struggling, but this has had no impact on what Joe Public thinks about his state, his responsibilities and future opportunities. Essentially state activity is not connecting with the mass of society – so, regardless of whether you welcome or reject the big society activity, ultimately its current narrative (or lack of) is sadly failing to resonate.

In fact if you read the list out in either a deprived neighbourhood blighted by years of unemployment, wasted state investment and low aspirations or in a prosperous leafy suburb only slightly feeling the pinch from the European recession people would look at you equally puzzled – the Big Society simply means zip on the doorstep of Britain. That is a a missed opportunity for both the UK state and society – there is such a good story about a better future state and society to be told, one which gives people struggling today some real hope about tomorrow, a story that all of the UK – rich and poor – should and could have a stake in shaping. When the US was on its knees, as a result of the Great Depression at the end of the 1920s, FDR didn’t just give the people a list of New Deal programmes he gave them a new hope, a narrative people could connect with: ‘the only thing we have to fear is fear itself.’ Without such a state narrative that connects with society, the hollowing-out effect which Mount talks about will just continue to get bigger, weakening society further.

Still, don’t write off the Big Society just yet – who knows, maybe that boldness, courage and vision required to ensure the state is redesigned to strengthen society rather than itself  will come from somewhere. Hope is good thing.

Library crowdfunding

This month the California State Library, opposite the Capitol in Sacramento, is celebrating the 75th birthday of San Francisco’s fabled Golden Gate Bridge. On May 16, the monthly “A Night at the State Library” program will present the 1968 film Bullitt, starring Steve McQueen as a San Francisco police lieutenant and “showcasing an almost 11-minute car chase in which the Golden Gate Bridge is visible”. Brilliant!

These programs, which enhance access to and engagement with great public institutions such as libraries, are a positive contribution the state can make to help strengthen society. They not only promote greater knowledge and learning but, more importantly, also provide opportunities for people to come together, connect and exchange ideas with each other – the very fabric of a good society. This is why the work of the California State Library Foundation (CSLF) is so important – it provides private support (through membership, donations, grant-bids) to enhance the role of the state library as an active partner within society (i.e. Governors book fund, California research bureau work, Saturday hours program, etc)

For scholars of social innovation though, there is surely a huge opportunity here to work with the Foundation to expand entrepreneurial support for those using the library to develop their innovative ideas. Many potential entrepreneurs (regardless of whether they realise they are one yet) do spend time thinking, researching and meeting in Californian state libraries. Some of these may have some outstandingly good ideas, but most of which will never get off the ground for various reasons (i.e. not realising potential market, lack connections to angel investors in the Bay Area, lack critical mass support, etc)

How can the California State Library Foundation help? Well, it could provide an on-line platform for a Californian state library user with an idea to pitch it to the whole membership (all users) of state libraries. The platform would allow members, if they like the idea, to collaborate virtually and provide start-up capital for idea to become a social venture. For example 1000 members could all like a pitch they read about, and the first 500 to sign up $10 each to support the new social venture could each be given 0.1% equity share in the venture (it would be an open question what dividends they are investing for: could be financial or social impact returns).

Obviously such investment platforms are not new – we know them as ‘crowdfunding’ – but they are rapidly becoming more credible with new technological innovation. State institutions – such as libraries – which are in the fortunate position of already possessing access to both potential innovators as well as a critical mass of potential investors should look to exploit this institutional advantage to catalyse more connections, for the benefit of society. This is especially the case given the recent passing of the JOBS Act that now allows crowdfunders to receive equity in small companies

For entrepreneurs using the State library, an in-house crowdfunding platform has three extremely powerful advantages. Firstly, in an era when credit and institutional VC is more risk-averse, the platform provides a much needed alternative to raise seed capital and – given risk will be dispersed across a collaboration of micro-investors rather than concentrated in the hands of a couple of big ones – ideas with greater social returns (but bigger financial risks) are more likely to be funded. Secondly, it provides an instant feedback mechanism for aspiring entrepreneurs and their ideas: if people don’t think it will work they won’t invest – this is invaluable information for entrepreneurs as it signals a sharp return to the drawing board before any more resource is wasted pursuing an unsustainable idea. Finally, it connects the idea with a potential market: the mass of people who see it and invest in it may also provide the first wave of customers / participants for any new product / service.

The CSLF could also move beyond simply facilitating the crowdfunding platform to being an active player in it to. In the UK Adrian Hon, the founder of the online games company Six to Start, has written recently about potential hybrid crowd and public funding models. Essentially the CSLF could take an initial stake in ideas that it thinks would benefit the work of the California State Library and the Foundation’s mission. This would firstly provide an incentive to entrepreneurs to come forward with ideas that could have direct relevance to the library and the Foundation’s mission (as they are more likely to secure funding – individual funders will be more likely to sign up if they see an insitutional investor has taken an equity stake). Secondly it could encourage both the state library and its users to work in greater active partnership as they all have a mutual interest in ensuring their investment is successful.

I think this is something the CSLF should seriously consider – it could have huge benefits for itself, the libraries users, and most importantly Californian society.

Pro-social welfare

This month Michael Norton’s fantastic Tedx talk ‘How to buy happiness’ was posted on the Ted website. The central thesis of Norton’s talk was that money can indeed buy happiness, when you don’t spend it on yourself and he had research to show that ‘pro-social spending’ can benefit you, your work, and other people.

Norton cites a simple experiment done by the British Columbia University which neatly compared two randomly assigned college undergrad groups in Vancouver. Individuals in the first group were each given an envelope with money in it (either $5 or $20) and instructions to spend the money on themselves (i.e. gift for self, bill, expenses) by 5pm of that day. Individuals in the second group were each given an envelope with same amounts of money in it and instructions to spend the money on somebody else (i.e. charitable donation, gift for others) by 5pm.

The researchers phoned the participants at the end of the day to find out what they spent the money on and how happy they were now. Firstly they found that people who spent for themselves bought consumer goods (i.e. make-up) and drinks (i.e. coffee), and people who spent for other people either donated the money (i.e. homeless), or bought a gift for others (i.e. toy or coffee for others to enjoy). Most impressively though the researchers established that those who spent money on other people got happier, whilst those that spent money on themselves experienced no change in their happiness level. The other effect they found was that the amount of money doesn’t matter that much – it didn’t matter whether the individual spent $5 or $20, what really matters was the fact they actually spent it on someone else rather than on yourself.

California Work Opportunity and Responsibility to Kids (CalWORKs) welfare-to-work program serves all 58 counties in the state and is designed to assist welfare recipients to obtain or prepare for employment. We know that many (long term) welfare recipients of state benefits experience low levels of well-being and personal self-esteem and we know, from past studies in California by the nonpartisan Urban Institute act, that in itself is a major barrier to re-entering the labor market.

So, could CalWorks try using the State Aid card accounts (the same card accounts which between 2007 and 2010 were used by benefit claimants to draw $69m of welfare money from ATMs outside of the state – $11.8m alone in Las Vegas) to increase CalWorks recipients spending on other CalWorks recipients? For example CalWorks could partner with Starbucks so that say 2% of total monthly welfare put on that state aid card could only be used in a starbucks buying coffee for someone else. Perhaps this would fuel increased reciprocal exchanges (exactly the sort of actions that we know strengthen neighbourhoods) and help tackle the sort of social isolation / low self-esteem that really inhibits long-term welfare dependants from re-entering the labour market?

Of course there is the risk with such a ‘use it or lose it’ approach to spending public money on someone else that it could lead to both welfare recipients being happy just to lose it, and non-welfare recipients being anything but happy with their taxes going on coffee. However with a bit of imagination, the state could introduce a challenge so non-use of the allocated fund each month would have a negative consequence for all Californians. For example, it could be announced that all the unused funds each month will be transferred to Starbucks branches in Washington DC and be offered up as a subsidy for any Federal government bureaucrat based around Capitol Hill! So perhaps the state could galvanise all of society to support a ‘spend on others’ scheme on the West Coast?  Based on Norton’s research it really could be in all of society’s interest.

A mutual media

The UK is currently in the grip of a media frenzy about, ironically enough, the media. The fall out from the illegal hacking of private mobile phones by Rupert Murdoch’s best selling Sunday newspaper, The News of the World, has resulted in a judicial enquiry raising more serious concerns about the power media moguls have over state politicians. The allegation being that owners of the mass media use their considerable influence to extract concessions from state decision makers that are in their own (commercial / ideological) interests regardless of the negative or positive impacts on wider society.

Whether you disagree with this suggestion (like Rupert Murdoch) or you do not (seemingly all Murdoch’s past editors!) it now seems largely irrelevant as most people in the UK seem to have lost trust in the institution of the media to promote and protect the interests of society. The lack of faith in media ethics in the UK is worrying for society (and dare I say it a little bit hypocritical of a nation that craves inside gossip about the private lives of celebrities, nobody is forced to buy the sunday paper or go online to the Daily Mail). The media can play a crucial role in both holding the state to account and reflecting society’s values and emotions if done effectively. If a perceived problem of rotten ownership of the media puts that at risk, then the state has a legitimacy to intervene and reform the system – but how could it do it?

This is exactly what Lord Justice Leveson, who is heading up the judicial enquiry, has been tasked with recommending at the end of his hearings. Perhaps though Lord Leveson could be advised to take a well-earned break one weekend from the trials and tribulations of the process and fly over to Barcelona. While there he should take a trip to the Noucamp, home to Barcelona FC one of the most famous and successful soccer clubs in the world. It is also one of the sporting world’s biggest mutual – it is owned by 150,000 members all of whom have an active (voting) stake in the running of the club.

In 2009 the Birbeck sports business centre gave an interesting presentation arguing that the mutual ownership and governance structure of FC Barcelona does not appear to hamper its ability to compete in financial (and sporting) terms. In recent times there have been other leading mutual brands that have outperformed shareholder owned companies not just in terms of profit and growth but more impressively consumer confidence in that brand. This cuts across all sectors in the UK including retail (John Lewis department stores) and finance (The Co-operative bank).

So if Lord Leveson is contemplating how to restore society’s confidence in the media, as well – one might argue – as attempting to get society to have a greater stake in and take more responsibility for the media it consumes, then potentially a new mutual model (or even just part mutual) of ownership should be considered. Many would argue the transition from media oligarchy to media co-operatives would be just too difficult. This is short-sighted though and lacks the sort of vision that helped the smooth transition of google from private company to public listing.

For example, a visionary like Rupert Murdoch might be tempted to sell membership of one his papers such as the highly popular daily The Sun to its readership by adding the one-off membership price to the cost of the paper. So, say on Monday next week instead of the Sun costing £0.50 it would cost a one off £5.00, but for that extra £4.50 the reader paid on that day they are given (via some txt message registration confirmation) a life time (voting) membership of the Sun – say each year they could vote in/out the editor and president of the newspaper.

In return the reader membership have the power to de-select the editor in the same way the proprietor now holds that power. Not only would this strengthen accountability of the paper to society, it may also improve the financial sustainability of newspapers by giving members an added incentive to support their paper – if the members don’t buy the paper (even if the price has to increase to remain viable) then they lose the asset which they now own: this creates an incentive for members to advocate readership to non-members.