High Trust Funding The MSD Experience

1. High Trust FundingThe MSD Experience Ministry of Social Development April 2010 Setting the Scene Good morning Pleasure to be here. Acknowledgements. Part of the Family and Community Services team from MSD MSD through its three business groups fund over 3,000 community social services to deliver services to children, families and communities. Contracts worth about $500 million dollars in total. Government is reshaping the way it delivers social services to ensure that the things we fund meet the needs of families and deliver real social and economic value. More than ever, in this current environment, we need to make sure every penny spent on social services in a way that produces results and makes a difference to people and families. Since July 2009 we have been developing a new contracting model that allows government to work with the social services sector in a much more efficient and effective manner. It essentially frees up trusted providers to do more of what they are already doing - deliver effective services to families. So let�s find out more about it. Setting the Scene Good morning Pleasure to be here. Acknowledgements. Part of the Family and Community Services team from MSD MSD through its three business groups fund over 3,000 community social services to deliver services to children, families and communities. Contracts worth about $500 million dollars in total. Government is reshaping the way it delivers social services to ensure that the things we fund meet the needs of families and deliver real social and economic value. More than ever, in this current environment, we need to make sure every penny spent on social services in a way that produces results and makes a difference to people and families. Since July 2009 we have been developing a new contracting model that allows government to work with the social services sector in a much more efficient and effective manner. It essentially frees up trusted providers to do more of what they are already doing - deliver effective services to families. So let�s find out more about it.

2. What is trust? Trust men and they will be true to you; treat them greatly, and they will show themselves great. � Ralph Waldo Emerson Without trust there is nothing What is trust? First off, what is trust. How is it defined ? The Collins dictionary says that trust is a firm reliance on the integrity, ability, or character of a person or thing. And the verb to trust means to have or place confidence in; depend on something or someone . In our world today, trust is more important than ever, especially when it comes to your relationships with the people you work with every day � your clients, employees, service providers - in fact all stakeholders in your business. Trust is critical in any type of relationship because a relationship without trust is not really a relationship at all. Just as trust is crucial to personal relationship, it is also the foundation of the survival and success of any type of business - no matter what that is � commercial, non profit- community or government. Without trust there can be no sustainable business. Over the long-term, all business success is dependent upon a network of positive relationships. Trust is invariably the critical component in enhancing these business relationships. The moment a person is not trusted by an individual or team, their chances for success within that group are diminished dramatically. So that leads us to the obvious question � if we do not trust the people we do business with � what are we doing funding them? So let�s see what happen when you do not trust your friends. ( Click on video link )  What is trust? First off, what is trust. How is it defined ? The Collins dictionary says that trust is a firm reliance on the integrity, ability, or character of a person or thing. And the verb to trust means to have or place confidence in; depend on something or someone . In our world today, trust is more important than ever, especially when it comes to your relationships with the people you work with every day � your clients, employees, service providers - in fact all stakeholders in your business. Trust is critical in any type of relationship because a relationship without trust is not really a relationship at all. Just as trust is crucial to personal relationship, it is also the foundation of the survival and success of any type of business - no matter what that is � commercial, non profit- community or government. Without trust there can be no sustainable business. Over the long-term, all business success is dependent upon a network of positive relationships. Trust is invariably the critical component in enhancing these business relationships. The moment a person is not trusted by an individual or team, their chances for success within that group are diminished dramatically. So that leads us to the obvious question � if we do not trust the people we do business with � what are we doing funding them? So let�s see what happen when you do not trust your friends. ( Click on video link )

3. The new way Doing the right thing not just doing things right And when you do trust your people - you also trust that they know what they are doing. One of the most important elements of our new approach is the core belief that it is communities � not government that is best placed to know what works best for them. And those who work in the communities are the people who are connected to the people and families in their neighbourhoods. They know the problems, the issues, what works and what doesn�t. They work in many different areas from dealing with family violence, working with young parents, helping victims of sexual abuse, to giving budget advice and information. They are the people there at the right time to help those who need support get back on track with their lives. When they are locked into a predetermined set of activities - they are no longer able to respond to their actual clients needs. When their funding comes with allsorts of tick boxes, reports, compliance and measurements - they find they spend more time on servicing the paperwork than servicing the client. It can close off opportunities to provide better results for their clients and provides little tangible benefit to the families they are trying to help. The focus becomes on of averting risk rather than whether the services are actually making a difference for clients. In an ideal world, contracts are designed to reinforce trust and reduce risk. Overly prescribed contracts � can undermine the very thing they are supposed to reinforce � trust If trust is about ethical behaviour and good intentions � why then prescribe every detail of a service. Think of a marriage � how long do you think a marriage would last if everything in the marriage contract was specified meals seven night a week, conjugal relations twice a week, keep a clean the house, earn $60,000 a year. Wet list, dry list for weekend. Do we see children as clients of the marriage. Let�s have a look at this video to illustrate the point. In fact, it is not the contract that is important � it is the relationship behind the contract that is important. And this is what high trust contracting is all about. And when you do trust your people - you also trust that they know what they are doing. One of the most important elements of our new approach is the core belief that it is communities � not government that is best placed to know what works best for them. And those who work in the communities are the people who are connected to the people and families in their neighbourhoods. They know the problems, the issues, what works and what doesn�t. They work in many different areas from dealing with family violence, working with young parents, helping victims of sexual abuse, to giving budget advice and information. They are the people there at the right time to help those who need support get back on track with their lives. When they are locked into a predetermined set of activities - they are no longer able to respond to their actual clients needs. When their funding comes with allsorts of tick boxes, reports, compliance and measurements - they find they spend more time on servicing the paperwork than servicing the client. It can close off opportunities to provide better results for their clients and provides little tangible benefit to the families they are trying to help. The focus becomes on of averting risk rather than whether the services are actually making a difference for clients. In an ideal world, contracts are designed to reinforce trust and reduce risk. Overly prescribed contracts � can undermine the very thing they are supposed to reinforce � trust If trust is about ethical behaviour and good intentions � why then prescribe every detail of a service. Think of a marriage � how long do you think a marriage would last if everything in the marriage contract was specified meals seven night a week, conjugal relations twice a week, keep a clean the house, earn $60,000 a year. Wet list, dry list for weekend. Do we see children as clients of the marriage. Let�s have a look at this video to illustrate the point. In fact, it is not the contract that is important � it is the relationship behind the contract that is important. And this is what high trust contracting is all about.

4. Key elements of high trust contracting Relationship based Guided by key principles Focus is on what was achieved Relationship based means rather than just monitoring visits and reporting just on number of outputs delivered, we have face-to-face meetings with providers. We have conversations about how things are progressing. The key principles involve: Respect and value Integrity and good faith Shared accountabilities and shared risk Open, transparent, honest and timely communications Focus on outcomes. Story behind the #�s � what�s really changed? Tool we�ve used is RBA but there may be other options. It�s the outcomes that matter, not the process we follow. Relationship based means rather than just monitoring visits and reporting just on number of outputs delivered, we have face-to-face meetings with providers. We have conversations about how things are progressing. The key principles involve: Respect and value Integrity and good faith Shared accountabilities and shared risk Open, transparent, honest and timely communications Focus on outcomes. Story behind the #�s � what�s really changed? Tool we�ve used is RBA but there may be other options. It�s the outcomes that matter, not the process we follow.

5. The criteria ��. The provider is well established Has sound governance and management systems Is financially viable Has a good track record of delivering services to families And a good working relationship with MSD Beginning with 24 providers, start of our roll out�. In close contact with Minister. Just because a provider is not in list of 24 doesn�t mean you�re not trusted � have to have a phased approach. Learn as we go � this is a significant change for government. Providers are ready. Beginning with 24 providers, start of our roll out�. In close contact with Minister. Just because a provider is not in list of 24 doesn�t mean you�re not trusted � have to have a phased approach. Learn as we go � this is a significant change for government. Providers are ready.

6. Getting started  We know each other, we respect each other We invite the provider to consider a HTC We discuss and agree on risks opportunities We agree to embark on this journey together There are different risks for each of us Government NGOs The first part of the HT process identifies working together on the risks and opportunities for each of us. How will we mitigate these risks? There are different risks for each of us Government NGOs The first part of the HT process identifies working together on the risks and opportunities for each of us. How will we mitigate these risks?

7. The Journey Relationship managers identified Agreement on how we communicate Identify the target client group the range of interventions the results Each party I.Ds their relationship managers. We decide how often we will meet, what is the purpose of these meetings? Who will attend? What issues will we discuss? What are our principles for working in partnership, no surprises. We identify the client group � how many, where are they located, type of issues. We identify the types of interventions for working with this client group. What are the results that will be achieved for the clients and how will this be measured. This is all put together into a relationship agreement. We can now develop the HT funding agreement. Each party I.Ds their relationship managers. We decide how often we will meet, what is the purpose of these meetings? Who will attend? What issues will we discuss? What are our principles for working in partnership, no surprises. We identify the client group � how many, where are they located, type of issues. We identify the types of interventions for working with this client group. What are the results that will be achieved for the clients and how will this be measured. This is all put together into a relationship agreement. We can now develop the HT funding agreement.

8. The funding agreement Key elements Short and simple Allows for flexible service delivery One payment upfront per year One meaningful report per year Customised All looks good, but what�s the elephant in the room?All looks good, but what�s the elephant in the room?

9. What are we both afraid of?