South Carolina is the sort of state where they understand lots of great things in life, like NASCAR. Now they’re in the vanguard of SIBs and that’s a wondrous example of how things are growing not just in the USA but their spiritual home in Britain too…
Social Finance Market Grew By 22 Per Cent In 2011/12
Third Sector
Figures show that there is a “quiet revolution to transform the funding environment for charities and social enterprises”, says Nick Hurd, the Minister for Civil Society
The social finance market was worth £202m in the year to March 2012 – a rise of 22 per cent on the previous year – according to a report published today.
Growing the Social Investment Market says that 765 deals were carried out in the year and that 29 social investment finance intermediaries, or SIFIs, actively invested in 2011/12.
Of these, four large social banks accounted for 82 per cent of the market by value, although only 30 per cent of it by volume. Nine SIFIs that made investments of more than £1m a time accounted for another 15 per cent of the market value and 56 per cent of investments.
The report says that 89 per cent of respondents expect to increase their investments in social ventures over the next two to three years. It says that 90 per cent of lending was secured against borrowers’ assets, up from 84 per cent the previous year. Unsecured lending was £20m over the year, compared with £26m the year before.
USA – SIB: South Carolina As Global Leader In Innovation
thecherawchronicle.com
Even if you don’t know what an SIB is, and few people do, this headline is surprising — if not downright shocking. But it is true.
We are not accustomed to seeing the words “SC” and “global leader” in the same sentence, and certainly not with the words “government” and “innovation” thrown in.
So first, what’s an SIB, and why should we care about it?
SIBs, or social impact bonds, are a new financing tool that governments are experimenting with as a way to provide needed services without a lot of upfront costs for programs that may or may not work.
Here’s how it works: a unit of government, such as a state department or a city, identifies a problem that it wants solved, and creates a specific set of goals and metrics by which to define and measure success in solving it. Then, a service provider with expertise with this problem is linked with a private funder, like an investment fund, bank, foundation, etc. who puts up the money and is paid back with a premium by the government, but only if the service provider meets the success criteria. Some call it “pay for success,” as it offers a risk free way for governments to tackle tough social problems that may take years to succeed.