Two excellent thought provoking articles today. The first relates to the success of the first Australian bond in New South Wales (NSW) while the second is a cri de coeur about the necessary relocation required in the nonprofit community to which alas far too many nonprofits react with blanket denial of the problem…
Investors Scored A 7.5% Return On Bonds To Create Better Parents, Now The NSW Government Wants To Expand The Plan
Alex Heber – Business Insider
The NSW Government is planning to issue more social benefit bonds soon, following a successful trial last year.
The Newpin bond, created to improve parenting skills, delivered a 7.5% return to investors in its first year, according to Community Services Minister Gabrielle Upton.
With $7 million in working capital tipped in by investors, the returns from the bond allowed UnitingCare Burnside to run intensive parenting courses to restore 28 children to the families from out-of-home care.
The success of the trial has got Upton thinking about where else a similar framework could be applied.
“It was our opportunity as a state to get innovative,” she told Business Insider, adding investors are remunerated when social outcomes are met.
The bonds save government money while taking advantage of a strengthening social investment and corporate social responsibility movement in Australia.
Upton told Business Insider she thinks there is great opportunity to use the bonds to improve housing outcomes for people.
Nonprofits Must Show How They Serve The Common Good
Mark Rosenman – Philanthropy
Nonprofit organizations and foundations have to make hard strategic choices about how and where to take action as problems grow worse and resources are stretched even thinner. Essentially, they need to think about their distinctive societal role in considering their options.
The notion of distinctiveness becomes more complex with so many other organizations seeking ways to do good: social-benefit corporations, for-profits owned by nonprofits, groups offering social-impact bonds and market-financing schemes, and other efforts that have increasingly blurred the lines between nonprofit and for-profit sectors.
Based on findings from years of personal polling from the back seats of taxicabs around the nation, I’ve found the public thinks that nonprofit organizations are characterized by volunteerism, sacrifice, and donations from rich and poor—all in service to those in dire need. But that’s clearly not true for much of the charitable world. What, for instance, makes a nonprofit day care center different from a for-profit one across the street?
When I ask that question, nonprofit leaders most often say that the nonprofits provide services to those who can’t afford to buy them. But when insurance companies, governments, and others are paying for services the nonprofit provides,, and the organization is getting special tax treatment, it’s hard to argue that the nonprofit is really there to address a failure in the market. Furthermore, we know that the lion’s share of nonprofit revenue comes from fee-for-service just as in a business.