The great news today is the early feedback from Australia’s SIB issuance in New South Wales is going well and has passed muster from KPMG. Happy reading:
NSW Social Benefits Bonds Trial Success
Pro Bono Australia
An assessment by KPMG of the NSW Social Benefit Bonds trial has given the scheme a tick of approval.
The Evaluation of the Joint Development Phase of the NSW Social Benefit Bonds Trial has declared the scheme to be viable in NSW having produced positive outcomes.
Social benefit bonds are a form of ‘payment by results’ (PBR) scheme in which private investors provide up-front funding to service providers to deliver improved social outcomes, with the rate of return to investors dependent on program outcomes.
The Trial has resulted in the development of two Social Benefit Bonds in early intervention:
i. The Newpin Bond – A $7 million bond over seven years is funding UnitingCare Burnside’s (UCB) Newpin program, which provides support for families to facilitate their child’s return from foster care. Principal repayment and financial returns are paid to investors dependent on the restoration rate of children to their families.
ii. The Benevolent Society Bond – A $10 million bond over five years is funding the Resilient Families service, which provides intensive work with up to 400 families and children for 12 months, including up to nine months post-crisis support. There are two tranches of investment, with principal repayment and financial returns to investors differing and dependent on the performance of the service.
The KPMG evaluation of the planning and development of the bonds found that social benefit bonds are viable in New South Wales (NSW).
With a growing focus on the environment, our social footprint and the principles of ethical corporate governance, the investment process, across all of these asset classes, is evolving.
The term ‘impact investing’ is increasingly being used to describe when asset managers proactively integrate one or more of these three elements into their investment strategy. It represents a move towards a new way of investing, with social conscience at the forefront of every deal.
In simple terms, impact investing is investing in companies, organisations and trusts with the intention of generating measurable social and environmentally-useful outcomes, as well as achieving a financial return on the investment.