The Roca bond is still much discussed, as a $27 million programme deserves to be, while there are two stories from British newspapers today. It is good to see a coherence of mature SIB analysis from both the Daily Telegraph, a bastion of the Tory party and the left wing Guardian.
That said, I actually find the UK moves to hugely incentivise tax for social impact investments (Telegraph story) deeply flawed. By skewing the returns through tax, the government is playing politics and not actually encouraging the open market to solve the problems.
The Guardian article is particularly well-considered as it discusses the potential imbalance of interest – but not in the knee jerk shrill ‘capitalists will take all the money!’ sense which is both short-sighted and tedious. Rather there is a useful primer as to how government might prefer to see average results delivered, not excellence, and thus see an improvement in their social fabric without having to pay fully for a more successful programme.
SIBs must be about the best possible result for society and that means maintaining the core win win structure of the bonds.
Doing Good Is Not Incompatible With Making A Profit
The Telegraph
Doing good and doing well are not incompatible. Charity is wonderful but there are times when more direct incentives than pure philanthropy can provide work most effectively.
Britain is a world leader in this respect and as of the Budget next month is poised to extend that advantage.
Paying For Results: Can Banks And Investors Finance Social Success?
The Guardian
Joe Finn is trying to get Massachusett’s homeless population into stable housing. All he needs is a few million dollars – not exactly lying on the ground for most non-profits. Finn has been trying to seal the deal for nearly two years. Other programs have leapfrogged ahead and investors have proven tough to negotiate with. For many non-profit directors looking to get government help, the pioneers are paying a price in time and money as they wait for all the pieces to come together.
It’s a price many are willing to pay…The programs, known as pay-for-success contracts or SIBs, are supposed to impose capitalist discipline on the chaotic, often untested world of social work.
Biggest ‘SIB’ In The U.S. Targets Stubborn Recidivism
Forbes
Massachusetts recently announced a $27 million seven-year “social impact bond” aimed at reducing the number of at-risk former inmates who go back to prison or jail. It’s the country’s largest investment in this new type of funding.