SIB News today begins with Congressman John Delaney being interviewed and ends with a comment by John Delaney from a recent forum in Washington. In the middle is a hop across the Atlantic where the reformist British Minister Iain Duncan-Smith has been discussing his ‘Quiet Revolution” in welfare.
Interview: US Congressman John Delaney On Ground-Breaking Federal Social Impact Bonds Act
Vibeka Mair – Responsible Investor
Last year, a bi-partisan group of US congressmen introduced the first-ever bill proposing a social impact bond framework at federal level.
The bill proposed that the federal government would establish desired outcomes to pressing social challenges, such as increasing adoption rates of teenagers in foster care. State and municipal governments would then submit proposals to work towards these outcomes.
The US Treasury would set aside $300m to pay for positive outcomes of state projects to private investors, fund feasibility studies and evaluate the projects. The bill has been re-filed this year in Congress and has been bolstered by a bi-partisan companion bill in the Senate – meaning there will be two bills simultaneously considered in both houses. If both measures move forward quickly in their respective chambers, then the chance the bills will be passed becomes greater. With bipartisan support in the House and Senate, the social impact bond legislation has a chance of success.
General Election 2015: Iain Duncan Smith Unveils ‘Quiet Revolution’ For Welfare Reform
Ian Silvera – International Business Times
The UK Secretary of State for Work and Pensions has outlined his “quiet revolution” for welfare under a future Conservative government.
Iain Duncan Smith stressed that the next parliament must be about getting money flowing to “where it will have the most impact”.
The senior Tory, speaking at an event hosted by think tank Reform, also said there is still “much more” to do in order to “unleash the full potential of the so called social investment market”.
“Broadly unnoticed amongst commentators in the media, we are developing a way to ensure that government – and local government – spending can be tied to outcomes,” he added.
Duncan Smith pointed to the government’s use of social impact bonds (SIBs) of using the market in welfare reform.
The instruments enable social investors to fund particular service and the government pays them if an intervention is deemed successful.
Supports of SIBs argue that the instruments reduce government expenditure in the long-term.
The Department for Work and Pensions (DWP) has 24 SIBS running, 10 of them financed by the ministry’s £30m Innovation Fund.
Duncan Smith estimated that these reforms could generate £500m of savings over the next parliament.
“In rolling out SIBs more widely, the government has done a lot to put the infrastructure in place: through Big Society Capital, the world’s first social investment wholesaler and the social investment tax relief, which could generate up to nearly £500m over another five years,” he said.
From Blur To Precision
Heather Grady – The Huffington Post
More than 200 foundation leaders, policymakers, academics, entrepreneurs, and experts came together at George Washington University (GWU) in January for an invitation-only gathering to advance the development of what many call the “fourth sector” — for-benefit organizations that primarily pursue social or environmental aims, while raising a substantial proportion of their revenue through earned income or commercial activities. The Federal Reserve Board, the University’s Trachtenberg School of Public Policy, the Urban Institute, and The B Team convened the event.
G8 Social Impact Investment Taskforce chair Sir Ronald Cohen contributed a helicopter view of the field. While “governments stare at a yawning gap” in resources, he pointed to Chicago’s $17 million social impact financing for education, and 15 Social Impact Bonds underway in the United Kingdom.
Some politicians think the emergence of new legal structures for for-benefit organizations is something that both major parties in the United States can agree on. Democratic Congressman John Delaney from Delaware called this approach “bringing together the best ideas of progressives and conservatives, and not by mushy compromises.” He cited the bill he and Republican Representative Todd Young introduced with seven other co-sponsors, H.R. 4885, the Social Impact Bond Act. Former Senate Finance Committee Staff Director Russ Sullivan suggested skipping DC-based advocacy and instead demonstrating how for-benefit organizations in politicians’ home states can help solve challenges like job creation in their own backyards.