Three stories today after we enjoyed a long weekend. Seoul has launched the first Asian SIB which is very exciting news while there are two other examinations of the SIB/DIB/PFS breed…
Seoul Social Impact Bond (SIB)
On February 18 2014 a press release announced that a Social Impact Bond had been launched in Seoul. It came from the The Department of Women and Family Policy, Office of Children and Young People, Seoul Metropolitan Government. This is the first Social Impact Bond in Asia, although several other countries are exploring the concept.
The Social Impact Bond will provide child welfare services over three years to a total of 10 billion won (US$9.4 m). The services will work with children and young people in group homes to improve their social outcomes and build capacity for long-term independence and wellbeing. The goal is to increase the efficiency of public welfare and improve social composition. “Through this project, children in children’s group homes can grow into healthy members of society.”
Bonds With Impact
Richard Harbord – Room151
SIBs are a rather special type of investment vehicle, where the money borrowed is used to improve social outcomes and make a measurable future saving for the public sector. Currently few and far between, they rely on funds provided by the Cabinet Office and Big Lottery, and have the potential to be very useful indeed to the public sector. They tend to be used as an invest-to-save vehicle in the areas of prevention and early intervention, which have traditionally been difficult to fund. Investors provide external funding to cover the initial cost of a project but receive a return only if pre-agreed and measurable outcomes are achieved. The major intermediary for these vehicles is Social Finance UK which has considerable expertise in making SIBs a success. Their definition is: “Social impact bonds are based on a commitment from government to use a proportion of the savings that result from improved social outcomes to reward non-government investors that fund the early intervention activities.” There are several main sources of funding available to help SIBs work.
Benefits For Stakeholders
Social impact bonds are a multi-stakeholder partnership which includes government, not for profits, investors, communities, and intermediaries in constructing and supporting the implementation of these projects. Under a successful social impact bond, each stakeholder group distinctly benefits, and our services are designed to ensure that social impact bonds will successfully deliver on this potential.