PLY: Two crunchy articles from opposite sides of the world…
Response To “The Payoff of Pay-for-Success”
Kasturi Rangan & Lisa A. Chase – SSIR
Last Word: V. Kasturi Rangan and Lisa A. Chase respond to the eight people who commented on their article examining the pay-for-success model.
We thank George Overholser, Tracy Palandjian, and Jeff Shumway for their insightful and thoughtful commentaries about our article, “The Payoff of Pay-For-Success.” Their observations regarding the roles of investors, service providers, and governments in future pay-for-success (PFS projects) reveals how quickly the model is evolving. A careful reading of the two responses leads us to believe that our perspectives have much in common, despite differences around PFS’ potential unintended consequences.
Even in areas where our opinions diverge, the responses are not entirely unequivocal, underscoring the uncertainty that still exists at this early stage of the field’s evolution. For example, while acknowledging our projection that a few nonprofits may benefit disproportionately, Palandjian and Shumway (of Social Finance) argue that industry consolidation is a good thing (better run organizations will grow through access to PFS funding), while at the same time conceding that they do not yet see this trend developing. Similarly, while Overholser (of Third Sector Capital Partners) argues for pervasive government adoption of performance-based government contracting without investor capital (which we all agree would be an overwhelmingly positive breakthrough), he recognizes the catalytic nature of philanthropic and impact investor capital at this stage. Given the inherently organic nature of PFS, this indicates to us that the landscape could unfold quite differently from any of our projections.
SBB Benefits Investors & Families
Pro Bono Australia
Australia’s first Social Benefit Bond has successfully restored 66 children in out-of-home with their families while investors received strong financial returns, according to results from auditor Deloitte.
At the end of its second year, the New Parent and Infant Network (Newpin) Bond, also prevented a further 35 children from entering out-of-home care, according to the audit.
The cumulative restoration rate for children was 61.6 per cent, triggering an 8.9 per cent return to private investors. This is up from a 7.5 per cent return in the first year.
The Bond, a partnership between the New South Wales Government, UnitingCare and Social Ventures Australia (SVA), works with parents who have had their children removed from their care, or whose children are at risk of removal, to create safe family environments.
SVA raised $7 million from investors to run the seven-year program that restores children to their parents’ care once the Children’s Court NSW is satisfied that parents have developed the skills needed to provide a safe home.