Two very interesting articles to provoke thought on a Monday morning as well as news of a conference about the DIB concept. Welcome to another week working to make the world a better place…
Does “Pay For Success” Actually Pay Off? The ROI Of Social Impact Bonds
Rick Cohen – NPQ
The concept of Social Impact Bonds is so popular in many circles that politicians believe that they can score points when they make SIBs part of their campaign platforms. Winnipeg mayoral candidate Paula Havixbeck pitched SIBs as “a new tool that other countries have had tremendous success with.” The press report didn’t identify which SIBs Havixbeck might have cited as tremendous successes, given that none of the handful of SIB demonstrations has reached any point of financial or program success, though some may in the end do so.
Established politicians have latched on to the concept, too. In Chicago, Mayor Rahm Emanuel announced an ambitious program of social impact bond financing to enroll more children in pre-K classes. The program, to be launched next month, would get 2,600 children into half-day preschool classes over four years. The SIB targets would be met with payments for each pupil who, after pre-K, does not get placed in a special education program ($9,100 per pupil), is deemed ready for kindergarten after pre-K ($2,900), and scores above the national average for third-grade reading ($750).
SIBs are also the cloak of respectability sought by some wealthy investors, or so some SIB pitchers believe. In the Huffington Post’s “Impact” page of contributed articles, Sharon Foulston, who describes herself as “founding a Social Impact Bond to finance a home for single mothers,” a “Business Angel for many years mentoring and investing in entrepreneurs,” and interested in “the mystical world of Tarot,” offers a creative pitch to moneyed people. Pitching her SIB idea to “the second generation of wealth owners, the inheritors of a period of industry and sustained economic growth,” Foulston describes those inheritors of wealth as having reached “a higher level of social conscience, seeking rewards far beyond that which mere money can bring.”
Getting Private Investors To Fund Public-Health Projects
Anna Gorman – The Atlantic
Inside her single-story home in the dry and dusty Central Valley, Dalia Mondragon scarcely sleeps. Several times a night, she tiptoes into her children’s rooms to make sure their chests are peacefully rising and falling.
“I feel like any time they could stop breathing,” she said.
Mondragon and all four of her children have asthma—a disease that has sent them to the hospital more times than she can count. So she is more than willing to open her home to Nunu Sixay, an asthma prevention worker trying to figure out what is triggering the attacks. On a recent visit, Sixay found some possible culprits: mold in the bathroom and aerosol furniture polish in the kitchen.
Sixay’s work visiting low-income families like the Mondragons is part of a public-health experiment to help asthmatic children breathe easier and stay out of costly emergency rooms—with the aim of ultimately getting investors to pay for the program.
The plan is to create a “social-impact bond,” a contract in which Wall Street and other investors agree to support programs with goals such as taxpayer savings and improved health outcomes. If the programs can demonstrate with solid evidence that they have met those goals, the investors recoup their principal and get a return, typically from the government. In some cases, as in Fresno, grants fund the initial work before organizers turn to investors.
Development Impact Bonds Conference – London 10 December 2014
PCDN
GRM International will be hosting a conference on Development Impact Bonds (DIBs) in London on 10 December, 2014 and we would like to invite you to join us for what should be an interesting day!
Development Impact Bonds (DIBs) have grown out of the recent success of mobilising private funding to achieve social impact in developing countries – the first Social Impact Bond was put together by Social Finance in the UK, supported by the Rockefeller Foundation, with the aim of reducing recidivism in Peterborough Prison, and recent results, four years after the SIB started, have shown tangible success. There are now 16 social impact bonds in the UK; four in the U.S.; two in Australia; one in Canada; one in the Netherlands; one in Belgium; one in Germany; and more than 100 proposals world-wide.
The conference speakers will include:
David Hutchison, CEO Social Finance – Early mover and experiences from Peterborough to Uganda ie how the SIB turned into a DIB
Mike Belinsky, Co-Founder Instiglio on lessons from the Rajasthan
This conference will examine issues around design of DIBs, hear lessons from early pilots, discuss issues around the procurement of DIBs in the context of donor procurement guidelines, explore effective evaluation of DIBs, and look at the way forward for the growing community of those involved in DIBs.
To REGISTER or email: training@grmfuturesgroup.com for inquiries and group discounts.