Innovation charity Nesta has bought a stake in the government’s Behavioural Insights Team, which is to be spun out of the Cabinet Office as a mutual company, selling its services back to governments and the private sector.

The Behavioural Insights Team (BIT) was set up in 2010 within the Cabinet Office to find “intelligent ways to encourage, support and enable people to make better choices for themselves”. It is known colloquially as the government’s Nudge Unit. Nudge is an increasingly used term to describe the theory that you can create large changes in society by prompting small actions or ‘nudges’ to help people make good decisions.

The unit was due to only run for two years, but after a government review found the team was generating a number of requests from international governments and local government, it decided to keep it going, a Cabinet Office spokeswoman said.

Continuing strong demand in government for its services prompted Cabinet Office to decide last year to shape it into a mutual joint venture, arguing that this will better enable the team to grow and service government and others.

BIT’s 16-strong team is now to leave the Cabinet Office to become a new company part-owned by Nesta, the government and BIT employees. Nesta is providing £1.9m worth of financing and service to the new company.

The new venture will be housed in Nesta’s London offices and will market its services to governments abroad, the UK central and local government and private companies. The BIT is already working with the New South Wales state government in Australia.

The BIT has had a special focus on the impact of nudge on charitable giving, releasing a report in 2012 on the subject. It invested in multiple real-world experiments, from prompting legacy donations to payroll giving sign-ups, finding often that small nudges had potentially transformative effects on donor response. 

Commenting to the team’s new structure and its partnership with Nesta, a spokeswoman said: “We are a seasoned investor in early-stage companies with a social purpose which is why we are so excited to be joining forces with a team that demonstrates the impact smart innovation can achieve. We are very much looking forward to helping the BIT team grow.”

 

Fundraising magazine in February will focus on nudge in giving.