August 02 2016

Britain embraces progress (reported in Australia) while the West Australian newspaper attempts to hatchet SIB progress locally with distinctly glass half full thinking.

UK Introduces New Social Investment Power for Charities

Lina Caneva – Pro Bono Australia

The UK Charity Commission has issued guidelines around a new law that gives statutory power to charities to make social investments.

The commission published the guidance for trustees about the new social investment power as the first phase of the Charities (Protection and Social Investment) Act 2016 which came into force at the end of July 2016.

The UK Charity Commission said for the first time, social investment had been defined in legislation.

A social or impact investment is any investment activity which has an expectation of both a social outcome and a financial return.

For Not for Profit organisations it represents a form of repayable finance that can be used for capital investment, revenue funding development, capacity building or other ways of improving their sustainability.

Social investment can take the form of secured loans, overdraft facilities or social impact bonds where investors put forward the capital and are repaid by the government based on the results or social impact made by the charity’s program.

In the UK loans are made by social investment finance intermediaries (SIFIs), who borrow capital from wholesale lenders like Big Society Capital and turn this into financial products for Not for Profit organisations.

In Australia, the Victorian Government announced in July its first social impact bonds that would focus on reducing disadvantage through drug and alcohol treatment programs and young people transitioning from out of home care.


Bid To Profit From Helping Mentally Ill

Ben Harvey – The West Australian

The head of one of WA’s biggest charities is fine-tuning a plan to let private investors profit from getting mentally unwell people out of Graylands Hospital.

St Vincent de Paul Society WA chief executive Mark Fitzpatrick has briefed Premier Colin Barnett and Mental Health Commissioner Tim Marney about allowing investors to back his charity’s mental health experts.

Investors confident in St Vincent de Paul’s abilities would put up the money, known as a social impact bond, to pay for accommodation and support for patients let out of Graylands.

If the patients successfully integrated into the community, the investors would be awarded a success fee, which is the bond’s yield.