AN INTRODUCTION TO SOCIAL IMPACT BONDS
MAY 2013
Ben Jupp, Director
ben.jupp@socialfinance.org.uk
Social Finance is authorised and regulated by the Financial Service Authority FSA No: 497568
SOCIAL INVESTORS ARE DEVELOPING NEW STRUCTURES TO
CREATE SOCIAL & FINANCIAL VALUE
The Peterborough Social Impact Bond exemplifies a new contracting model, a new
delivery model and a new social investment model
INVESTORS
£5 million Return depends
on success
HMP
PETERBOROUGH
SOCIAL IMPACT PARTNERSHIP
Payment
based on
reduced
convictions
MINISTRY OF
JUSTICE/
BIG LOTTERY
FUND
St. Giles Trust
SOVA
MIND
Ormiston Trust
Other Interventions
Providing specialised
support pre- and postrelease to high/medium
risk clients
Providing volunteer
support pre- and postrelease to low risk clients
Low level mental support
to prisoners while they
are in prison and post
release
Support to prisoners’
families while they are in
prison and post release
Support needed by the
prisoner, in prison and
the community. Funded
as the need is identified
3,000 male prisoners sentenced to less than 12 months
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A NUMBER OF SOCIAL IMPACT BONDS HAVE BEEN LAUNCHED
OR ARE IN DEVELOPMENT
Reducing
NEETS (x5)
- DWP
Peterborough
reducing reoffending - MoJ
Reducing
NEETS (x4)
- DWP
Reducing
rough sleeping
- GLA
Intensive
Fostering Manchester
Edge of Care Essex
Adoption
Shared Lives
Drugs
Recovery
Health & Care
HMG Social Outcomes Fund
Big Lottery Support
Wider set of contractual developments – e.g. PBR, risk sharing, - and developments in social investment
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DIFFERENT MODELS ARE APPROPRIATE IN DIFFERENT CIRCUMSTANCES4
1. Developing Edge of Care
Services
2. Developing Shared Lives Schemes
Social Investor
Social investors
1) Investors capitalise
company
1) Investors capitalise
incubator
SIB Company
3) MST service contract
2) Outcomes based
contract with ECC,
based on fewer
young people
needing care
Action for
Children
Young people & families
Essex County Council
©Social Finance 2013
SHARED LIVES INCUBATOR
-Investment
-- Business support
-Professional standards
-Back-office
SL
Scheme
Local
authority
2) Incubator a partnership
between national charity,
investment intermediary and
investors
3) Incubator provides
organisational
development, professional
standards, performance
management & back-office
functions
SL
Scheme
Local
authority
4) Schemes develop
medium term contracts
with LAs to expand
placements & improve
outcomes
LESSONS
5
1. Social investment can help support the
development of a range of social
enterprises:
2.
•
Service developments – scaling, franchising
•
Buildings/assets
•
Credit Unions/CDFIs
Social Impact Bonds can be a powerful
way to develop new services and help
transfer risks for commissioners:
3.
•
Combining social and financial rigour and a focus
on outcomes
•
Working with socially motivated investors is
valuable, at least for early deals
Working through a detailed
understanding of social needs, financial
flows and contractual and delivery
structures is important before deciding
on the most appropriate investment
approach:
•
Value of feasibility studies
•
Pros and cons between internal and social
investment
©Social Finance 2013
Value social ventures
and commissioners
understanding the social
needs, financial flows
and investment options
before deciding on an
approach