August 25 2015

More news from New South Wales, Australia…

Newpin Success Paves Way For Social Impact Bond Expansion
David Donaldson – The Mandarin

The lure of paying for outcomes, rather than inputs, is leading governments around Australia to watch the progress of the NSW social impact bond pilot programs. The results so far suggest a successful outcome and room for growth.

Several state government and the commonwealth have taken the strong returns of the Newpin social impact bonds as the way forward for achieving outcomes within a constrained budget and risk appetite.

Australia’s first social benefit bond has helped return 66 children in care to their families, resulting in a 8.9% per annum return to investors, according to second year financial results.

The Newpin bond, created in 2013, is a seven-year, $7 million pilot program run by UnitingCare to test the use of social impact bonds in Australia, aims to restore children to their families from out-of-home care, or prevent them from entering care in the first place, through creating safe family environments.

It does this by funding an intensive 12- to 18-month course for parents of children aged five years or under, with strong outcome targets and performance measures guiding returns to investors in the program. As with other social impact bonds — known as social benefit bonds in NSW — investors are paid based on results.

This year’s 8.9% Newpin result builds on a first-year financial return to investors of 7.5%.

A total of 113 families were referred to Newpin this year, up from 86 in Year 1. A total of 42 children were restored to their families during Year 2 (and were still with their parents at 30 June 2015). This is up from 28 restorations in Year 1, giving a cumulative restoration rate for the first two years of the bond is 61.6%.

The program has also supported an additional 35 at-risk families in preventing their children entering into out-of-home care.