The autumn blizzard of stories continues today with discussion of how SIBs received so little reportage from their discussion at the US House of Representatives ways and means committee recently. True international worries are an issue but I would contend the widespread willful ignorance of the broad media It’s a key factor too.
Anyway three thought provoking stories today, happy reading!
Ways & Means Committee Hearing On Social Impact Bonds Gets Little Attention
Rick Cohen – NPQ
It is more than a little surprising to us at the Nonprofit Quarterly that the House Ways and Means Committee hearing on the Social Impact Bond Act introduced by Rep. Todd Young (R-IN) and Rep. John Delaney (D-MD) received just about no mainstream press coverage. One possible explanation might have been that last week was devoted largely to the nation’s international crises, particularly the decision to expand bombing of ISIS from Iraq into Syria. That’s tough competition for a hearing on SIBs.
Little could be found aside from statements from the hearing posted on the Ways and Means website and some brief coverage on the hearing, either in the lead-up to it, such as this piece from an Enterprise Community Partners blog*, or in its aftermath, such as this brief post from the Social Innovation Research Center, the latter described as an apparently-nonprofit “consulting and evaluation firm specializing in social innovation and performance management for nonprofits and public agencies,” led by Patrick Lester, a former VP for the Alliance for Children and Families.
Wait Continues For Social Benefit Bonds Decision
Sally Rose – Sydney Morning Herald
Despite making all the right noises about supporting social bonds, the NSW government is yet to announce any further details about expanding its trial, leaving many in the non-profit and investment community worried the promising program may be losing momentum.
Last year, the NSW government commenced a multimillion-dollar trial based on social impact bonds in the United Kingdom and United States. Social benefit bonds, as they have been dubbed locally, are a new breed of financial instrument being used by governments to help fill the funding shortfall needed to provide social services. The better the measurable social outcome achieved by the organisations behind the “bonds”, such as a reduction in the number of children entering the foster care system, the bigger the financial return paid to investors.
UnitingCare’s Newpin $7 million social benefit bond, the first in the NSW trial, recently passed its first 12-month hurdle delivering a return of 7.5 per cent for the year to investors.
The coupon was financed by the program, which works with parents at high risk of having a child permanently placed in the foster care system, qualifying for a pay-for-performance bonus under its service delivery contract with the state government.
KMPG estimates UnitingCare’s Newpin program could save NSW $80 million by 2030.
Impact Investing Is Kind Of A Big Deal
Devin Thorpe – Forbes
The world is awaking to impact investing. Finally.
More and more we are seeing institutional investors allocating substantial sums to impact. Audrey Choi, CEO of Morgan Stanley’s Institute for Sustainable Investing explains the underlying drivers as a confluence of circumstances, “While the concept of adapting one’s investment philosophy to align with institutional or individual values has been around for centuries, today, a number of powerful political, economic and societal mega-trends are combining to produce a global investment landscape that increasingly demands more transparency, more accountability and more integration of beliefs and values into all spheres of activity. Taken together, these factors help accelerate the development of sustainable investing.”
Maya Chorengel, a co-founder of Elevar Equity, an impact investment fund that finances social ventures, notes, “Impact investing should be central in discussions about the future of capitalism. Wealth inequality is prominently featured in these discussions today; wouldn’t we rather turn attention to the democratization of capital, which is one important category of impact investing?”