Now there’s an interesting thought for the new year – SIBs first appeared in Japan in 2008? That’s our final story for today and in the interim there are several excellent interventions to be savoured!
Happy New Year and all the best for what will be a breakthrough year for DIBs and SIBs from the Young Markets and DV Advisors team who produce this newsletter!
Merrill Taps Rich Investors For Ex-Convict SIB
Reuters
Merrill Lynch and U.S. Trust reached out to some high-powered clients this quarter to invest in a social-impact bond whose proceeds finance a program to lower recidivism rates among ex-convicts in New York.
The project raised $13.5 million over 60 days from clients of the Bank of America Corp-owned brokerage and wealth management firms. Investors included former U.S. Treasury Secretary Lawrence Sommers, Utah philanthropist James Sorenson, hedge fund founder Bill Ackman’s Pershing Square Foundation, and the Laura and John Arnold foundation.
Press release here.
Cuomo Helps Ex-Convicts Re-Enter The Workforce Through Pay For Success Project
Long Island
Governor Cuomo announced Tuesday that New York will take the lead in the nation with the launch of the state-run Pay for Success project that will provide training and employment opportunities for ex-convicts.
The project will start by offering assistance to 2,000 formerly incarcerated individuals this month, and is being funded by private sector and foundation investors. The investors raised over $13.5 million in less than 6 weeks to support the project, which is also known as a Social Impact Bond.
Development Impact Bonds: Success Depends On A Supportive Network
The Guardian
Development impact bonds (Dibs) are a new business model for tackling complex social problems in international development.
In these programmes, a donor such as the Department for International Development writes a contract with a service provider in which it agrees to pay the provider only for the successful outcomes of its programme. For example, DfID would pay a workforce development organisation not for the number of people it trains, but for the number of its graduates who receive stable employment. The provider would raise money from socially-motivated investors to fund its work. The donor pays for the programme after verifying that it had achieved results, and investors get their investment back, plus a premium for taking the risk that the programme might have failed.
Dibs are a variation on SIBs, which have been implemented in developed countries for similar social gains.
Over the past three years national and regional governments in Australia, England and US – as well as in places like India, Morocco, and Uganda – have started designing over 40 SIBs and DIBs.
Japan – Sales Of SIBs Recovering
The Japan News
Sales to individual investors of “social impact bonds” designed to support programs that benefit society, such as those trying to reduce poverty in developing countries and stop global warming, are rapidly recovering in Japan.