PLY: Legacy media once again prove eager to write off a concept just as it is on the cusp of succeeding. ..fret not the ‘specialist’ financial media (sic) are invariably incapable of foresight, this is a standard growing pain…
Meanwhile there is some good news from the other side of the Atlantic, in Liverpool UK.
U.S.’s First Impact Bond A Bust
Robert Milburn – Barron’s
Just two weeks ago, it was announced that the U.S.’s first social-impact bond — a fixed-income like investment used to finance social good — failed to produce the desired financial and philanthropic returns. As a result, the five year investment was scrapped after three years.
The laudable $7.2 million deal, inked in August 2012, aimed to reduce youth recidivism at New York City’s Rikers Island prison by as much as 20%. Had the program hit this target after five years, the New York City government would have paid out a 4.4% annual return to investor Goldman Sachs. At the same time, it cost New York City nothing to sign off on the intervention, since Goldman Sachs was providing all the upfront capital and returns were to be paid out of savings generated from not sending these individuals back to jail.
Bridges-backed Career Connect Delivers Key SIB Milestone
Bridges Ventures
A social impact bond-funded programme run by Career Connect, a charity that helps disadvantaged young people in Merseyside achieve better education and employment outcomes, has become one of the first in the world to over-deliver against its social objectives and repay all the loan capital (plus interest) to its social investors. It has now been recommissioned to deliver a second programme.
These are significant milestones for the nascent market in social impact bonds (SIBs), a concept that has been attracting growing interest from policymakers and investors around the world. Both Career Connect and Teens & Toddlers – a Manchester-based charity that has also delivered a successful SIB-funded programme – serve as timely illustrations of SIBs’ potential to produce better outcomes at lower cost to the taxpayer, while also helping to inform future policy.