Social impact bond
The first social impact bond was announced in the UK on 18 March 2010 by then Justice Secretary Jack Straw, to finance a prisoner rehabilitation program.
[19] The idea of a social impact bond has generated significant interest from government officials in multiple countries, including US, UK, and Australia.
[20][24] In Australia, the intention to trial social impact bonds was announced in New South Wales in November 2010 by Premier Kristina Keneally of the Australian Labor Party.
[26] In November 2012, Essex County Council became the first local authority in the UK to commission a social impact bond in Children's Services,[27][28] with the intent of providing therapeutic support and improving outcomes for adolescents at risk of going into care.
[29] Although the product was later withdrawn from sale due to lack of investors,[30] the Future for Children Bond combined a relatively low-risk ethical investment into affordable housing to provide the funds to repay capital to investors, with a greater risk investment into a social impact bond with the intent of delivering a greater social effect and providing an additional variable return.
It would have invested into the social impact bond for Essex County Council to ‘improve the life outcomes’ of children aged 11–16 at risk of going into care.
Social impact bonds bring together government, service providers and investors/funders to implement existing and proven programs designed to accomplish clearly defined outcomes.
According to the GO Lab, a 'core' SIB is therefore defined by “100% payment on outcomes”, “independent and at-risk capital”, “a high degree of performance management”, and “a strong social intent of service providers”.
In October 2013, Social Finance Ltd. and the Center for Global Development released a report[38] outlining the findings of a high level working group set up to explore the potential of this new mechanism.
[41] The expected public sector savings are used as a basis for raising investment for prevention and early intervention services that improve social outcomes.
[20][42] Advocates also believe that SIB programs can achieve positive social outcomes, may create fiscal savings for government, but also involve changes of funding arrangements that bring risks to service agencies.
The Social Impact Bond in Peterborough was launched by Secretary of State for Justice Kenneth Clarke MP and Prisons Minister Crispin Blunt on 10 September 2010.
An independent evaluation, performed by the Vera Institute of Justice, found the goal of reducing teenage recidivism by ten percent had not been met, at all, and the city paid nothing to Goldman Sachs.
[57] Initial outcomes indicate that, at least in the first phase of these PFS projects, the interventions did not produce the desired effects of reducing recidivism and improving employment among the populations of concern.
"[41] Federal: The U.S. Department of Justice gave "Priority Consideration" to Fiscal Year 2012 Second Chance Act grant applications that include a Pay for Success component.
[64] Several States in Australia have now initiated social impact bonds - the latest of which is Victoria which, on 21 December 2017, announced the conclusion of a SIB deal with Sacred Heart Mission.
[59][70] Australia's second Social Impact Bond concerning chronic homelessness was initiated on 21 December 2017 by the Victorian Minister for Housing, Disability and Ageing.
Fresno is one of the nation's worst places for asthma; about 20 percent of its children have been diagnosed with the disease, which takes an especially heavy toll among poor communities.
"[73] Federal: The U.S. Department of Housing and Urban Development (HUD) announced in 2013 it will provide $5 billion in grant dollars to assist in the rebuilding and strengthening effort resulting from Hurricane Sandy and encouraged the five states effected by the storm to make use of Pay for Success strategies where appropriate.
[74] In 2013, the Department of the Treasury issued a Request for Information (RFI) that will help design a proposed $300 million Incentive Fund to further expand Pay for Success.
These studies assessed the potential of social impact bonds to fund preventive and early intervention services which improve outcomes for children and generate cost savings for Local Authorities.
Utah: In August 2013, the Goldman Sachs Urban Investment Group (UIG) together with the United Way of Salt Lake and J.B. Pritzker formed a partnership to create the first ever Social Impact Bond designed to finance early childhood.
[90] A list of more than 20 intermediaries and providers of technical assistance in the UK is maintained[91] as part of the Big Lottery Fund's Commissioning Better Outcomes programme.
