The big news is the return of capital back to investors in three UK SIBs. Splendid news after the US SIB Market showed the integrity to prune the Rikers Island bond when the programme was not succeeding.
Triple Triumph: Three UK SIBs Return Investor Capital
Ellie Ward – Pioneers Post
Three social impact bonds (SIBs) in the UK have performed above expectations and delivered outcomes sufficient to return investor capital earlier than expected.
The announcement comes not long after the first US social impact bond was terminated early having failed to achieve the agreed targets of reducing recidivism – and amidst ongoing criticism from individuals in the social enterprise sector who argue that the hype around this financial mechanism is unfounded.
Andrew Levitt, investment director at Bridges Ventures and a board member for the UK-based Career Connect SIB, said: “The Career Connect story provides demonstrable proof that the excitement around social impact bonds isn’t just a case of hype over substance. The structure of the funding allowed Career Connect to experiment with new approaches, while the clear feedback loops inherent to the SIB model helped them to identify the most effective and focus their programme to reflect that. With a standard contract, none of this could have happened.”
In 2012, the Department of Work and Pensions (DWP) awarded SIB contracts to fund programmes run by Career Connect, Teens & Toddlers, and Adviza which are designed to address the root causes of young people becoming not in education, training or employment.
Failure As A Public Good
Ben Hecht (CEO, Living Cities) – Huffington Post
Last week, Jim Anderson of Bloomberg Philanthropies and Andrea Phillips of Goldman Sachs shared lessons from their investment in a social impact bond to reduce recidivism at Riker’s Island. In less than 850 words, they publicly admitted to the failure of the program to achieve its desired outcomes and announced its discontinuance. Yet they also deemed the effort a success in that it validated the underlying premises of social impact bonds, the financing mechanism behind the program.
Can you really fail and succeed at the same time? Yes, they did and we all need to do more of it publicly. In fact I found their work and their blog to be a huge contribution to the social change field. Why? By closing the first social impact bond in the U.S. they made real the idea that we can focus on lives changed, not simply people served. And their blog is helping us redefine success and establish learning as a critical public good.
Phila. Looks Into Pay for Success Model For Transitional Work Program For Ex-Inmates
Tricia L. Nadolny – Philly
In Philadelphia, where the prison population is over capacity and 40% of those released go back to jail within a year, city officials say they want to invest in a program like the Center for Employment Opportunities.
It’s a proven model for reducing recidivism rates. Philadelphia, though, wants to fund it in an unconventional way: by tapping private investors who would cover the cost and be paid back by the government only if the program succeeds.
If it falls short, those investors, not taxpayers, would take the loss.