In this interview, we spoke to Alex Stephany, CEO and Founder of social impact startup and TechForce19 winner, Beam. Beam is a startup which crowdsources new career opportunities for homeless men and women, using technology to find scalable solutions to one of the toughest social problems. Read this article to find out more about the latest ‘Impact Report’ they’ve launched which explores the impact of crowdsourcing and whether it could be used to solve other social problems.
I first got to know crowdfunding in 2016. I was CEO of JustPark – a VC-backed parking app – and we ended up pulling off what was the largest ever crowdfunding campaign for a tech startup. When I later left the company in search of running a company making a bigger social purpose, I started thinking about whether crowdfunding could be used to support the most disadvantaged people in society. This is what led me to starting Beam – the world’s first crowdfunding platform for homeless people.
The potential for crowdsourcing is growing every year, with the global crowdfunding market expected to triple by 2025 according to Fundly. What’s more, the Covid-19 crisis has seen a particular breakthrough for the use of crowdfunding in the public sector. For example, local authorities in the UK including Lambeth in London and Mansfield in Nottinghamshire have launched crowdsourcing campaigns through platforms like Spacehive and Crowdfunder to support their local communities. What once was exotic is becoming increasingly mainstream, helping public sector bodies to connect with their residents.
However, there is little data available on the impact of crowdsourcing, especially when applied to social problems. So we decided to take an in-depth look at this emerging model and whether it could be used to solve other social problems – from the refugee crisis to reoffending rates among prison leavers. We shared the findings in our Impact Report.
To start with, we analysed the effectiveness of Beam’s approach to crowdsourcing employment support for homeless people in the UK. Using Beam, homeless people can crowdfund whatever they need to support their progression into stable work in over 60 career pathways: whether that’s the cost of training, childcare, tools, textbooks or more. It’s a highly personalised approach that focuses on people’s unique strengths and needs. And the public can fund the progression of people out of homelessness with unparalleled transparency and efficiency.
At the same time, we are also able to use the platform to pool people’s social capital. Members of the public have sent thousands of messages of support through Beam’s tech platform while creating countless new opportunities. I think of Beam as an early example of how we can crowdsource solutions to a social problem: replacing a centralised, largely analogue one-to-many model, with an Internet-enabled, highly collaborative, many-to-many model. If you want an analogy: think the OED compared to Wikipedia.
Since launching in 2017, over 300 homeless people have started stable jobs, many of whom had been out of work for at least five years. A further 50 people have been supported into their own homes using this collaborative crowdsourced approach. We also looked at success rates: 76% of people who crowdsource employment support through us move into paid work. This compares to 31% on DWP’s Work Programme.
Graph: Percentage who start work with crowdsourced support versus comparisons
To understand the reasoning behind this, we dug into the four key barriers stopping homeless people from entering the workforce: poor wellbeing, financial barriers, limited incentives and inflexible support. When looking at existing programmes supporting people into work, none of them addressed all four barriers. For example, government programmes are not optimised to support people into well-paid work, and third-sector programmes do not have the funds to remove financial barriers. Therefore, people remain stuck in an unemployment trap for many years. Meanwhile a crowdsourced solution like Beam is able to address all four key barriers.
One person who has benefitted from this crowdsourced approach is single mum Christianah. After experiencing housing difficulties, Christianah found herself out of work and homeless. With Beam’s support, she was able to raise £4,557 from 223 supporters to pay for a dental nurse qualification and childcare. She’s now working full-time as a dental nurse and is able to provide for her family.
Beyond the individual success stories, we’ve also spent a lot of time understanding the economic impact of Beam’s crowdsourced model at scale. Our Impact Report shows that for every homeless person we support into work, the taxpayer saves on average £31,300 due to a reduction in welfare spending and additional taxable income.
Graph: Cashable savings per person starting work with crowdsourced support
So what are the learnings for central and local government when it comes to crowdsourcing?
- Stimulate innovation in employment services: Employment services are relatively unchanged in the last decade. Beam’s progress suggests there is scope for innovation that may lead to significantly improved outcomes and taxpayer savings. If a crowdsourced approach was expanded to work with 600,000 people (the number the National Audit Office states are long-term unemployed but close to work), the total savings would be over £10 billion.
- Use technology to enable lower-cost services that tap into the power of the crowd: Solutions to complex social problems must combine personalised approaches with the scalability and efficiency of technology. Crowdsourcing is an established approach that harnesses the power of communities to deliver concrete outcomes in a way that is both personalised and scalable.
- Further support outcomes-based payments: Outcomes-based payment, sometimes known as “Payment by Results”, is a commissioning model that locks in taxpayer savings by linking payments for services to the achievement of outcomes that create meaningful cashable savings. Beam gets paid by government partly on a payment-by-results basis. This keeps us laser-focused on providing the highest quality service that leads to positive outcomes for people alongside taxpayer savings.
Together, we can use the power of the crowd to solve the most difficult social problems. As Geoff Mulgan, Professor of Collective Intelligence, Public Policy and Social Innovation at University College London, writes: “It is right that responsibility for dealing with entrenched problems should be shared – and that we as citizens should play our part.”