Video: Update on Social Impact Bonds in Australia
Social impact bonds and pay for success financing are generating a great deal of interest around the globe, and the US has been at the centre of much of it since the turn of the new year.
Last week, Massachusetts became the first state to issue Requests for Response (RFRs) to obtain services for 'social innovation' financing, which includes pay-for-success contracts and social impact bonds. The state is looking to address the issues of chronic homelessness and juvenile justice, calling for service providers and intermediaries to offer their services (the solicitations can be downloaded here).
Then, just a few days ago, the Nonprofit Finance Fund recently released a report on an event they co-hosted in October 2011 with the White House Office of Social Innovation and Civic Partnership: Pay-for-Success: Investing in What Works. The event convened representatives from different levels of government, service providers, foundations, and academia to discuss the Pay For Success concept and its application in the US. The 4-page report (download PDF) provides a summary of what the group learned and discussed, and identifies areas of interest for further exploration and future pilots. Contributing editor for GOOD, Alex Goldmark, also picked up the report and placed the discussions in context.
A number of practitioners and observers have, appropriately, cautioned against hyping social impact bonds too much. As there is only one pilot in existence, and as it will take several years to get tangible results, there isn't a lot of evidence backing the viability of the SIB model. While a few lessons can be drawn from the examination of SIBs, there are still many unknowns. Katrina Cruz reported on a conference in December in the UK that raised precisely those fears, and Alex Fox, CEO of Shared Lives Plus UK, expressed the concern that SIBs may end up becoming the Next Small Thing.
Given all the current interest in this model, it is only natural to pick a Video of the Week relevant to SIBs. In this short clip, Les Hems, Director of Research at the Centre for Social Impact in Australia, provides an overview of what's happening Down Under. This is accompanied by a number of interesting videos provided by the Social Innovation Exchange, covering the measurement challenge, discussing the use of small scale projects and finding structures that work.
It is worth noting that the Treasury Department of New South Wales recently issued a Request for Proposals for a "Social Benefit Bonds Trial". According to Steve Goldberg, this signals the development of a procurement process for SIBs and related services that could well provide the model for similar procurement around the world.
We invite you to share your thoughts about this video below. What is your key takeaway from the conversation around social impact bonds,and how does it inform your work?