The good folks of Utah are in the forefront of the social impact bond revolution…All this and more in today’s SIB news.
Greetings from the Moscow Open Innovation Forum where I have just been chairing a panel on financial innovation – an incredible event all round!
Salt Lake County Looking Again To ‘Pay For Success’
Mike Gorrell – Salt Lake Tribune
Salt Lake County’s initial experience with “Pay for Success” has done well enough that council members are willing — with some reservations — to try it again.
On a 6-2 vote last week, the County Council approved Mayor Ben McAdams’ request to advance $150,000 from next year’s regional-development budget to hire a consultant, Third Sector Capital Partners, to help identify an area in which upfront spending now could save much more money over the long term.
Unlike the first go-round, when the effort focused from the get-go on beefing up preschool education in low-income Granite School District communities, this latest effort has not yet pinpointed a cause or two to underwrite.
The consultant will help the county do that and will lobby corporations and nonprofit organizations for the financial support to actually kick-start whatever programs are identified — and approved by the council.
Superannuation Funds Could Catalyse Impact Investment In Australia
Michael Traill – The Guardian
Having joined the social sector from the world of private equity 12 years ago, there’s one startling difference I encounter time and again. Organisations that are thriving in the business world can readily access capital for growth.
In the social purpose world access to capital is frustratingly difficult, and the pool of funding available in Australia has remained stagnant for years. There needs to be a radical rethink if we are to make progress toward ending entrenched disadvantage. We need to think differently about how we tap new sources of capital for social purpose, which is where retirement savings come in.
The emergence of the asset class, broadly termed “impact investing”, has the potential to help you grow your retirement savings and fund social purpose at the same time. Sound too good to be true? It’s not. At the heart of the approach is the adoption of business disciplines for social purpose.
Some larger institutional funds are already joining the game. NGS Super and Christian Super invested in Australia’s first social impact bond (SIB) in 2013, and they’ve just received a 7.5% interest payment after the first year. Investors in the pioneering Goodstart deal received a 12% return on their investment earlier this year.
Compare these returns to the 6% that is the average annual return for Australia’s largest superannuation funds over the 10 years to June 2013 and it starts to look pretty compelling.
If you’re one of the many Australians who manage their own superannuation, it may be time to look beyond the blue-chips and think about impact investing.
The Anatomy Of A Social Investor Revolution
Sharon Foulston – The Huffington Post
Welcome to the second-generation of wealth owners, the inheritors of a period of industry and sustained economic growth. The plateau that is now being reached enables this generation to be of a higher social conscience, seeking rewards far beyond that which mere money can bring. We leave behind the heady days of multi-million Pound deals where the leaders in a capitalist era used money as a way of keeping score.
“Be the change you want to see in the world,” Mahatma Gandhi implored. His words are easier to read and write than they are to live. It often takes the onset of parenthood to ignite a change, the realisation that our children are the future that causes us to question what sort of world are we leaving behind for them. Peace of mind, good health, happiness, friendships, family and community relationships suddenly become of greater importance than the acquisition of wealth and inflated salaries.
Our children are the leaders of tomorrow, and the family is where they are educated and indoctrinated. To me, the family is the area where we need to set our focus for moving society forward. Ensuring the stability and security of the family unit must surely be at the top of our agenda for a wiser, peaceful, more honest and socially equitable future.
Social services failure puts 5,000 children back in care each year in the UK. “Half of all children reunited with their families after leaving the care system end up returning to it, according to research that suggests a failure to support them is costing the taxpayer £300m a year,” reports Jamie Doward in the Guardian.
Clearly our money could be more wisely spent. I aim to encourage further private funding initiatives by spearheading a Social Impact Bond to fund a project investing in a home for at-risk single mothers and their young children, providing education and support aimed at keeping the family together and enabling their integration back into work and the local community. Inspired by similar initiatives in Australia and Canada, the Stowey House project enables me to fulfil a deep-rooted ambition to make a meaningful contribution to society by focusing on the most vulnerable members of society – our children.