PLY: Two interesting perspectives on SIB initiatives:
The Promise & Risk Of Social Impact Bonds
Editorial Board – Chicago Tribune
Illinois has launched a pilot program to help at-risk children across the state stay out of trouble. The program will provide intensive and expensive services — counseling, mentoring, tutoring, substance abuse treatment — to guide kids who are wards of the state.
Unlike other state programs, however, this one is costing Illinois … nothing. At least, not at first.
Several foundations and other investors are bankrolling the $1 million startup. Next year, investors are expected to pour more money into the program so that it can be ramped up to serve hundreds of children over four years.
If the program works — if the state demonstrably saves money — investors stand to reap a return on their investment from the state. If the program doesn’t work — if it doesn’t produce the agreed-upon goals — investors lose their money. The state doesn’t fork over a dime.
The idea — called social impact investing or “pay for success” bonds — is gaining momentum across the country. The concept landed on Harvard Business Review’s list of audacious ideas for solving the world’s problems. No pressure there.
Gaps In The Ecosystem: How To Make Social Finance Flourish
Ellie Ward – Pioneers Post
Last month Antony Bugg-Levine, the chair of the Global Impact Investing Network, told delegates at London’s Critical Mass conference that in the world of social finance there were “hypers, haters and doers”. Clearly, this nascent market will only flourish if it is the ‘doers’ leading the charge.
In order for these doers to lead the way however, there clearly needs to be greater understanding within the space as to the key barriers facing individuals working in different environments, whether that be in government, intermediaries or social ventures themselves.
At the Yale Club of London’s seminar on Social Finance, hosted by the Royal Bank of Scotland (RBS), panelists attempted to take on some of the barriers preventing the development of the social finance market on a case by case basis.
Whilst social impact bonds (SIBs) remain a controversial and relatively small element of the social finance market in the UK, momentum around them is increasing, thus providing the case that they should be addressed. SIBs also relate closely to the wider issue of making government procurement practice more generally focus on the social and environmental impact of its purchasing decisions.