Nothing especially crunchy today but the usual mix of “SIBs are wondrous” from those who prefer their future an improvement on the past and, of course, the usual “abonimable no-men” arguments from the economic illiterates who want to keep life as it was in some allegedly halcyon bygone age when actually we didn’t even have ATMs, let alone smartphones…
Happy scrolling and enjoy the weekend:
Interest Grows In Social Impact Bonds (subscription)
Dan Peters – The MJ
More pension funds will look at investing in social impact bonds in future, it has been predicted.
Former director of the West Midlands Pension Fund, Brian Bailey, told The MJ there was growing interest in the finance model despite a number of obstacles.
What ‘Pay for Success’ Means
Mary Ollie – Idaho Press
House Bill 170, “Pay for Success,” is sponsored by Sen. Bob Nonini. The bill would let Idaho’s education department contract with private companies for education programs and then pay once the programs are shown to work.
The phrase “Pay for Success” seemed familiar, so I turned to Google, and the response was: payforsuccess.org/.
The carpetbaggers are at it again, trying to get taxpayers to subsidize the stuff that is supposed to be funded by business as a part of research and development. Worse yet, this bill gives an advantage to corporations and not the classroom practitioners, who in the past have been instrumental in producing innovative programs. It also gets the state more involved in local curriculum.
The website “Pay for Success” is a playbook. An education carpetbagger company approaches the Idaho Department of Education with an idea. Then the Department of Administration gets involved! Yes, that Department of the IEN fiasco Administration! A contract is drafted stating the pilot costs will be reimbursed if the project is successful. The pilot program is done and the evaluation is conducted by another “independent contractor.” If the pilot program is found to be successful, then the company gets retroactive payment for something that used to be a business cost.
In the past, pilot projects were a risk taken on and did not cost the participating institution. Research was evaluated by our land-grant universities and published in peer-reviewed journals. Many successful programs were developed by teachers working with university staff. Commercial programs were developed and piloted free of charge. If a program was successful, it was produced and distributed for a very reasonable cost.
HB170 is wrong on many levels. It subsidizes the educational-industrial complex, favors corporations over practitioners and researchers and adds to education costs.
The Naked Politician
James Eyers – Sydney Morning Herald
Gabrielle Upton is trying to apply a market-based discipline to an unwieldy and complex area.
The Baird government’s plans to privatise the state’s poles and wires brings increasing political risk, given the proclivity of the Labor opposition in NSW to stir up fear about government asset sales. But Upton perseveres with an agenda to radically reshape how the Department of Family and Community Services is financed. This includes exploring new investment models such as social impact bonds, public-private partnerships and joint ventures for delivering housing supply designed to alleviate fiscal pressure on a strained budget.
Upton says social impact bonds – new structures where private investors share in the risks and rewards of social service programs underpinned by government contracts – could reduce fiscal pressure on social housing. Her department has already backed two social bonds to fund programs to keep children out of foster care. She expects the private investment will save it more than $100 million over the next 15 years as the government has to pay for fewer carers as the program works to reunite families. Several institutional investors, including AMP, NGS Super, NRMA and Australian Ethical, backed the bonds. Baird said last month the NSW government was targeting two new social impact investments to go to market every year.
Social impact bonds subject charities to the scrutiny of the capital markets because the terms of the bond contract are focused on achieving specific social outcomes, and investor returns improve as the outcomes do. Social bonds and other forms of social impact investing have “the potential to benefit government and taxpayers by reducing costs and improving social policy outcomes”, said the final report of David Murray’s financial system inquiry, published by the federal government in early December.
Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis
Keith A. Allman & Ximena Escobar de Nogales
In order for impact investing to professionalize and mature as an industry, rigorous processes and critical analysis must be understood. To address this need Impact Investment offers step-by-step guidance that puts the focus on the investment process and social impact measurement. The authors outline the everyday tasks that are necessary to master in order to become a savvy impact investor, such as accounting, corporate finance, valuation, statistical measurement, and social metric analysis. In addition, the text includes a running example of a theoretical solar lantern manufacturing and distribution company that illustrates the methods and concepts in action, and a full-fledged case study using downloadable professional-level analytical tools, which consolidates all the examples into a real-world setting.
Available now on Amazon in hardcover and Kindle.