The British Commonwealth states of India and Canada as well as Australia, have been early adopters of SIBs alongside the USA. Here’s a commentary from Australia…
The State Of Social Investment In Australia
Social investment is big in Australia or, at least, it soon will be. The state government of New South Wales (NSW) is currently in the process of piloting Australia’s first Social Benefit Bonds (SBB), the equivalent of Social Impact Bonds (SIBs) in the UK.
SIBs, which involve investors funding that aim to improve a particular social outcome and receiving a return (or not) based on the outcomes achieved, are seen by the UK government as an important new method of funding charities and social enterprise to deliver social change in a cost effective way.
The first SIB, launched in 2010, funds services aimed at reducing re-offending amongst prisoners released from Peterborough and there are now 14 SIBs in operation in the UK.
Australian politicians are just as enthusiastic. Launching the first SBB, NSW treasurer, Mike Baird told the Sydney Morning Herald: “Not only are we tapping into a new source of funding by partnering with social investors, but we have the potential to create better social results, while providing cost savings for the NSW government and delivering for investors.”
In the UK, one of the key aims of both social impact bonds and social investment is to enable charities and social enterprises to deliver more and bigger public contracts. The situation in Australia is different. A bigger proportion of Australia’s large charities and other not-for-profit organisations already deliver public services and receive nearly 60% of their income from the government, compared to 37% in the UK.