From little acorns giant Oak trees grow, the theme of today’s story in SIB News…
Analysis: Social Impact Bonds Take Small Steps In Early Years
Third Sector
Fledgling projects such as Teens and Toddlers might be a template for funding of work by smaller charities
Payment by results is an increasingly common feature of public sector contracts. The mechanism has already been used in the government’s Work Programme and will be the way organisations are paid after the Ministry of Justice’s forthcoming overhaul of the probation service.
But payment by results provides a big challenge for charities of all sizes – particularly smaller ones that don’t have the necessary funds to wait for payment.
Social impact bonds, however, can offer help to smaller charities because the financial risk is taken by social investors that provide up-front funding. Fourteen bonds are already in operation, of which the best known is the one at HM Prison Peterborough, where a number of charities, including the St Giles Trust, have been working to reduce reconvictions. Interim results released by the Ministry of Justice in June showed the project had had initial success.
Another charity involved in running a social impact bond is Teens and Toddlers, which tackles disadvantage and social exclusion through a youth development programme. It runs 18-week training programmes that work with young people at risk of not being in education, employment or training.
The programme helps year 10 students to develop life skills by pairing them with toddlers in nurseries. The students also take part in training sessions, covering subjects such as employability and social skills. The charity was commissioned by the Department for Work and Pensions as part of its Innovation Fund in 2012 to expand the programme in the north west of England using the social impact bond model.
The bond, which has a value of about £3m, has enabled the charity to increase its work significantly. The programme, which aims to work with more than 1,100 young people over three and a half years, accounts for about 40 per cent of the charity’s total beneficiaries.
The contract is being managed by the social investment intermediary Social Finance, and the bond is being funded by social investors including the Barrow Cadbury Trust, Big Society Capital, Bridges Ventures, CAF Venturesome, the Esmée Fairbairn Foundation and the Impetus Trust.