The Peterborough prognostications continue. I am currently ‘officially’ on holiday but still producing this newsletter (and Exchange Invest – the daily benchmark read for everybody in exchanges, markets and platforms), I hope to have some time to add some more thoughts next week on the topic!!
Can The Peterborough Social Impact Bond Be Judged A Success?
David Ainsworth – Civil Society
The basic model of a SIB is that the charity agrees with a public funder that it will try to solve a problem – in this case, reducing the number of crimes committed by short-stay offenders leaving Peterborough prison. If the charity succeeds in reducing the problem, the public body – in this case the Ministry of Justice – will make a payment. Otherwise, it pays out nothing.
But the charity doesn’t take the risk. That’s taken by social investors, who front the cash to deliver the service. In this case, 17 charitable foundations jointly put up the money, around £5m. They will make a profit if the intervention works. If the intervention fails, they will lose out.