US news on SIBs, some more general requests for Social Impact investing encouragement in Australia, welcome to Tuesday’s SIB News.
(Meanwhile over on our core turf of expertise, we will publish the 400th issue of Exchange Invest, the world’s leading daily about bourses…).
Mass. Launches Pay For Success Initiative To Reduce Homelessness
Bailey McCann – Civ Source
Massachusetts has launched a new “Pay for Success” (PFS) initiative aimed at using philanthropic and capital investments to reduce chronic homelessness. The initiative will provide 500 units of stable, supportive housing for up to 800 chronically homeless individuals over 6 years, with the goal of reducing taxpayer burden for things like emergency shelter or Medicaid payments.
The initiative will be backed by social impact bonds which will be purchased by philanthropic and private investors to provide up-front funding for the project. Massachusetts will only repay investors if a third party evaluator determines the initiative achieved specific, predetermined outcomes that benefit society, including saving taxpayer dollars.
The project leverages $1 million in philanthropic funding and $2.5 million in private capital investments from Santander Bank N.A., the Corporation for Supportive Housing (CSH) and United Way of Massachusetts Bay and Merrimack Valley. Through the PFS model, the investors assume project risk by financing services up front with the promise of Commonwealth repayment only in the event of success.
The Commonwealth will make up to $6 million in success payments to repay investors and cover evaluation and intermediary costs. Success will be based on the stable housing for at least one year of chronically homeless individuals participating in the initiative. The maximum possible return to investors is 5.33%.
Fulton Co. Proposes Project To Fight Crime
Veronica Waters – WSB Radio
The Fulton County Commission has unanimously approved a decision to form the Smart Justice Coordinating Committee, which will develop policies to combine alternative programs with social services to cut crime.
“An ex-offender without support is more of a threat to society than an ex-offender with support,” says Commission Chairman John Eaves. “Some of the biggest challenges with recidivism are jobs, housing, as well as sometimes substance abuse issues.”
Eaves wants “Smart Justice” to replace a cookie-cutter, punitive-only approach to criminal justice with one combining a personalized mixture of law enforcement, social services and the private sector to cut recidivism by addressing those problems. He tells WSB that Fulton County is the first in metro Atlanta to embrace a model that has been successful in other parts of the country, including cities in Washington state, New York, Tennessee, and Alabama. The Smart Justice Advisory Council has been at work since 2013, researching methods of diversion, pretrial intervention, and social impact bonds, and exploring how they might be implemented in Fulton County.
Australia – Boost Impact Investing, Says FSI
Financial Standard
Recommendation 32 called for ways to facilitate development of the impact investment market and encourage innovation in funding social service delivery.
FSI chair David Murray also called for guidance to be provided to superannuation trustees on the appropriateness of impact investment.
The report said that impact investing, which is growing in prominence globally, allows investors to pursue opportunities that provide both social and financial returns thereby benefitting government and taxpayers.