The contemporary charity model, much like many other Victorian innovations faces challenges ahead. Therefore it is no surprise that politicians who still don’t want to understand the limits of government spending, are keen to complain about elements of the SIB model…
There are always clashes in revolutions but ultimately charities are in the risk business. If they do not perceive that or do not want to, then they are simply not fit for purpose.
Brutal thoughts I imagine to many NGO folks but it is a truth we need to accept to make progress.
Charities Criticised For Bearing Financial Risk In GLA Social Impact Bond
CivilSociety
A member of the London Assembly’s budget and performance committee has criticised the structure of the Greater London Authority’s first social impact bond for being too risky for the charities involved.
Meanwhile, a new report from the Social Market Foundation out today has warned that social impact bonds will be unlikely to appeal to mainstream investors because of the “impossibly” high risk they have to shoulder.
This month, the architects of Greater London Authority’s (GLA) first social impact bond, designed to tackle rough sleeping, gave evidence to the London Assembly budget and performance committee.
The social impact bond will see St Mungo’s and Thames Reach support around 800 rough sleepers in London. Triodos has raised around £900,000 in capital for the social impact bond from investors. The social impact bond will run from 2012-15 and if it meets prescribed outcomes investors can expect a return of 6 per cent per year.
However, Assembly member Liberal Democrat Stephen Knight, criticised the structure of the bond, where as well as delivering services, both St Mungo’s and Thames Reach are investors.