A profusion of crowd-funding platforms has emerged in the last few years, from the peer-to-peer lending site Zopa to microfinance giants Kiva. Theresa Burton and Michael Norton have stepped into the fray by setting up Buzzbnk – a crowd-funding platform for start-up social entrepreneurs.
So will crowd-funding platforms be the panacea for start-up funding? Matt Black of Social Enterprise Live caught up with Theresa to find out more.
This article introduces a new version of the social impact bond model, described earlier on SocialFinance.ca, that marries the SIB concept to new hybrid legal tools that are under consideration in the US and UK. Part I, published here, explained the potential benefits of this model. Part II, below, reviews current and future developments that can help turbocharge social impact bonds by harnessing new market structures.
The Social Impact Bond (SIB) works in the same way as the International Finance Facility for Immunisation, originally proposed by the UK government in 2003. This structure captured future government cash flows from future aid budgets to change the incentive structure for scale. In the same way, the SIB captures the value of a future cash flow resulting from a social sector intervention and then uses this to change the incentive structure for collaboration and scale by the government, the civil society sector, NGOs and the private sector.
At its simplest, the SIB monetises the value of a social sector intervention, in essence flipping the traditional model on its head since a cash flow is now tied to the delivery of a social outcome.
This is a video of Toby Eccles, founder of Social Finance (UK), explaining the Social Impact Bond (SIB) pilot undertaken in U.K. in spring 2010. The first such program in the world, it is a six-year pilot aimed at reducing reoffending rates of prisoners after they have been released. SIBs are an innovative method of financing social outcomes through collaboration between government, private investors, and social service agencies.
Last week, the first preliminary evaluation report from this SIB was released by the Ministry of Justice, United Kingdom. Based on interviews of those involved in developing and implementing the SIB, it aims to identify early lessons in SIB implementation.
In business there is belief in “first mover advantage”, when a company gains an advantage over competitors by being first to the market with a new product or service.
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Your Guide helps social entrepreneurs learn how to attract financing for their social ventures.
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Your Guide to Social Finance
SocialFinance.ca hosts an online guide that helps social entrepreneurs learn how to attract financing for their social ventures.
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