Three interesting articles today discussing the revolution in government, funding and provision which is being enabled by Social Impact Bonds in an era when the state has hit the buffers of what it can spend, happy reading:
Can Social Impact Bonds Reinvent Government?-The Urban Institute
DC Public Safety Radio
John Roman is a Senior Fellow at the Justice Policy Center of the Urban Institute. John addresses the lessons of social impact bonds and more importantly, their impact on criminal justice policy and the delivery of services to underserved populations.
From John’s article in the Huffington Post: “Results from the first generation of social impact bonds (also known as pay for success deals) are starting to come in. Today, the field has learned the results of the evaluation of the first social impact bond transaction in the United States.”
Understanding Social Impact Bonds & Pay for Success – Collection
Urban Institute
Pay for success (PFS) financing and social impact bonds (SIBs) have generated immense enthusiasm in the public and private sectors as a means to shift risk and generate new capital for social programming. In PFS and SIB transactions, private investors provide capital for an evidence-based social program. The investors’ principal is returned with a profit if rigorous evaluation concludes predetermined performance goals are met.
There are more than a dozen operating SIBs in the United Kingdom, and several PFS projects in US cities and states. However, transitioning from an experiment to a stable social funding structure requires a rigorous selection and evaluation process, and an appropriate pricing scheme for governments and investors. Urban Institute researchers have developed roadmaps for the next step for PFS development in the United States by drawing on evaluation research, policy development, and cost-benefit analysis.
These presentations and publications describe the implementation of this new financing mechanism in the justice system (although the concepts can be applied to any social sector). Sound PFS projects require strategic planning to identify a justice system’s cost and population drivers and the corresponding evidence-based solutions.
This model provides an innovative process for the government to clarify and quantify its policy goals and for philanthropic and commercial investors to leverage their charitable giving. Developing the instruments for efficient, standardized pricing and carrying out new programs through a defined model will be essential to build PFS’s stability, legitimacy, and ability to support sound social policy.
A Bolder Purpose: Investors Discuss Way Forward On Impact Investing
David Rowley – Investment Magazine
At the suggestion of the CIO of one of the largest superannuation funds in Australia, Investment Magazine organised a roundtable of some of the most prominent thinkers on the subject of social impact investing to share ideas on how more of the $2 trillion invested in superannuation could do some social good.
The meeting of five superannuation funds, two banks, one fund manager and two NGOs to discuss social impact investing at the Investment Magazine offices in Sydney in late June was one of the first of what is likely to be many attempts to help institutional investors find ways of using their capital to both obtain returns and help improve the fabric of the society in which super fund members live.