PLY: Sandwiched between the cri de coeur of Rep Todd Young that the status quo won’t do, is a fascinating post from Living Cities discussing PFS auditing while the UK budget adds some relief for social VC trusts. Interesting day, happy reading:
Needed: A Safety Net That Works
Todd Young
For the sake of the economy, the taxpayers, and the welfare recipients, we need reform.
Last month, the unemployment rate dropped to a seven-year low, but the labor-force-participation rate dropped to a 37-year low: a paltry 62.8 percent. It’s extremely hard for the economy to grow when the workforce is shrinking. And if we need more workers, I know just where to look: the millions of people who are still seeking jobs. We may not realize it, but a crucial step in building a healthy economy is helping people move from welfare to work.
That’s the way the safety net is supposed to work, but today it’s pretty ineffective — because nobody bothers to check up on it. Since the 1990s, only ten of our existing programs have undergone a rigorous, third-party evaluation. Nine of the ten were shown to have little or none of the desired effect. These programs too often fail beneficiaries and taxpayers alike — and by extension, the economy, which needs more robust participation.
The evidence tells us that a policy reset is long overdue. Safety-net programs must make efficient use of taxpayer resources and harness the capabilities of recipients by helping them move back into the workforce. That’s why, along with Congressman John Delaney (D., Md.), I’ve introduced legislation called the Social Impact Partnership Act, which would begin to transform the safety net along these lines. Social-impact partnerships — also known as social-impact bonds — are a financing mechanism that brings the idea of pay-for-performance to the social sphere.
From the 4 Cs of Credit to the 4 Ps of Pay for Success
Eileen Neely & Andy Rachlin – Living Cities
A new financing mechanism requires a new way of underwriting. Here are the top four things to consider before investing in any Pay for Success Project.
Young Introduces Legislation To Kickstart Labor Force-Participation-Rate
Ripon Advance
Reps. Todd Young (R-IN) and John Delaney (D-MD) recently reintroduced H.R. 1336, social impact financing legislation dubbed the Social Impact Partnership Act, in the face of a 37 year low in the labor force-participation-rate.
Social impact financing is already used widely in the United Kingdom, helping drive labor force participation rates to record levels. To date, however, it has only been used on a limited scale in the U.S.
“Too often, Washington focuses on inputs instead of outcomes,” Young said. “We spend too much time talking about how much or how little to spend on social safety net programs, and not enough time talking about whether or not we’re improving lives. Since the 1990’s, just 10 of these programs have been subject to rigorous scientific evaluation, and nine of them were found to have little to none of the desired impact. And yet we continue to fund these programs. It’s time we shift the focus to achieving desired outcomes, evaluating our social programs more carefully, and only paying for what works.”
First introduced by the duo during the last Congress as the Social Impact Bond Act, H.R. 1336 would expand and improve meaningful social and public health interventions and drive taxpayer savings by requiring the federal government to clearly define desired outcomes for a target population. Private sector and philanthropic investors would then be able to fund the expansion of scientifically-proven interventions aimed at achieving the defined outcomes.
Budget 2015: Government Will Introduce Social Venture Capital Trusts With 30% Tax Relief
David Ainsworth – Civil Society
Measures to introduce “social venture capital trusts” are among a number of Budget announcements to grow the use of social investment and social investment tax relief.
A social venture capital trust will allow multiple investors to put money into a fund, which then invests that money in asset-locked bodies.
Social VCTs use the same principle as social investment tax relief, introduced last year, which allows investors to make equity or unsecured debt investments in charities, community interest companies, community benefit societies and social impact bond companies, and reclaim up to 30 per cent of their investment against tax.