Another day another bumper SIB News brought to you by our handy crypto-NGO team (ie. we’re not for profit but we sponsor newsletter production for the betterment of the community).
Happy reading:
New Mexico Might Consider Social Impact Bonds For Expanding Early Childhood Services
James Jimene – New Mexico Mercury
Dr. Arthur Rolnick—the keynote speaker at our 2014 NM KIDS COUNT Conference—made a compelling case for higher levels of investment in early childhood care and learning services. Many people in New Mexico agree that these kind of investments will help us improve the well-being of our children. Unfortunately, there has not been a consensus in Santa Fe on how to pay for these programs.
Other states and countries are using a new financing tool—social impact bonds—to pay for preventive high quality early childhood programs like home visitation, childcare and early learning, and pre-K, which have a clear pay-off. The term “social impact bonds” is really a misnomer in that the government does not issue bonds to pay for the programs. Social impact bond financing programs are also referred to as “results-based financing” and “pay-for-success” programs. As these names imply, they are based on the premise that pay is made only when results have been delivered.
Launch Of Breakthrough Strategy To Catalyse $32 billion Social Impact Investing Market In Australia
Daniel Madhavan – Impact Investing Australia
On 16 September, leaders from Australia’s business, finance, government, philanthropic and community sectors came together at Customs House in Sydney to launch a report that maps a bold strategy to tackle some of our most pressing social issues through impact investing.
The Australian Advisory Board on Impact Investing’s Breakthrough Strategy, ‘Delivering on Impact’, targets growth for the impact investing market in Australia.
Over the next decade, the market for impact investments is estimated to be valued at A$32 billion within Australia alone, and between US$500 billion to US$1 trillion globally. The Australian Strategy focuses on delivery through leadership, policy and action. Working groups are already being brought together to progress initiatives, including a $350 million social investment fund.
Social Impact Investing – Whose Market Is This Anyway?
Emma Tomkinson – Pro Bono Australia
Tuesday saw the launch of Impact Investment: The Invisible Heart of Markets, the report of the Social Impact Investment Taskforce set up by the G8 and Delivering on Impact, the Australian companion report by Impact Investing Australia.
The event marked the beginning of a strategy to grow the Australian Social Impact Investment Market, with one a flagship initiative being the establishment of a Social Investment Fund for Australia that will grow to over $350m by year 5.
Investors attending and speaking at the event displayed impressive enthusiasm for investing with impact. But one could be forgiven for thinking that the purpose of this market is to make investors a lot of money and allow them feel good at the same time.
Paula Benson from NAB announced $1m to support capacity building for social purpose organisations to help them “step up and deliver” investment opportunities, saying they’ve now realised “only businesses can solve social problems”.
Gary Brader from QBE announced that they’ve allocated $100m to invest in social impact bonds. He said “you have to make this look and feel like an investable sector” so that investors can participate “without sacrificing financial return”.
It would be nice to think that the purpose of the social impact investment market is to solve the financing issues of our social purpose organisations. On September 3rd, at the Social Capital Markets conference (SOCAP) in San Francisco, Sir Ronald Cohen said, “that’s what impact investment is about: enabling social entrepreneurs whether they’re working through Not for Profits or for-profits, to raise the capital they need in order to improve the lives of others, or the environment”.
So what capital do social purpose organisations need? We simply don’t know. It would seem obvious that in order to solve this problem, we need to understand it. And the best way to do that is to invite the organisations that we’re trying to serve to tell us.