A social impact bond (SIB), also known as a social benefit bond is a type of ‘payment by outcomes’ funding mechanism which engages private capital for the execution of social initiatives.
To date, 60 social impact bonds have launched in 15 countries, raising more than $200m in investment for social programmes.
The paper details the results of 22 social impact bonds, the global growth of the financial model, the challenges faced and predictions for the future.
According to Social Finance, social impact bonds can improve the way government, the social sector, philanthropy and the investment community respond to social challenge – through partnership and collaboration, flexibility and responsiveness, investment, and a focus on data, outcomes, and measurement.
Alongside the paper, Social Finance has launched an online global database of social impact bonds.
The online directory can be sorted by country, issue area, investor, payer or service provider, giving a complete overview of live and proposed programmes worldwide.
In Australia, the Victorian government has recently joined the NSW, South Australian and Queensland governments in exploring this innovative approach to tackling endemic social issues.
In 2013, the New South Wales Government pioneered Australia’s first two social benefit bonds – the Newpin bond and the Benevolent Society bond, both focusing on prevention of out of home care for children.
Building on a first year return of 7.5 per cent, the $7 million Newpin bond delivered an 8.9 per cent yield to investors in June 2015.
In the two years of its initiation, Newpin restored 66 children to their families.