PLY: Welcome to the flurry of new readers in recent days. I remain committed to the SIB movement and passionate in its potential, together we can make a better world…
…as today is evidenced by news from opposite ends of the weather sphere, Australia and Chicago, enjoy the read:
Australia Govt. To Explore Impact Investing
Michael Roddan – Business Spectator
The government will prepare a discussion paper on impact investing in Australia following a recommendation from the Murray financial system inquiry, as it seeks to lower the burden the $150 billion welfare system places on the public purse.
Responding to David Murray’s financial system inquiry, the government said impact investing had “the potential to benefit government and taxpayers”, and it would look at developing reforms to give private ancillary funds greater certainty for investing in social impact bonds.
The Murray inquiry, which was handed down last December, urged innovation in funding social service delivery.
The government said it will produce a paper to explore the ways it could develop the impact investment market in Australia, and could introduce legislative amendments if necessary.
Impact investing, or social impact bonds, provide a way for private investors put up the money to fund social projects that can’t immediately be funded by the government. Investors share in the savings the government makes through efficiencies in providing services.
Federal Treasurer Scott Morrison, in his prior capacity as Social Services Minister, had flagged his intention to use social impact bonds in the government’s welfare responsibilities, following the lead of Mike Baird’s government in New South Wales.
Mr Morrison said social impact bonds could help to reduce the $150 billion social services budget.
Social Impact Bonds: Chicago Plays Pay For Success With Young Kids
Laurie Levy – Chicago Now
Chicago’s plan for funding preschool social impact bonds works like this: According to the Chicago Tribune, starting this school year and for three more years, borrowing money from the investors named above will finance 2,618 children’s education in half-day Child-Parent Center preschools. The City will save $300 million over the duration of all of these children’s educations if none of them end up in special education classes. CPS risks nothing by selling these social impact bonds, but pays the lenders substantial dividends for success (avoidance of costly special education services).