Three good stories today, we want to see that SIB webinar ourselves while Allen & Overy are a big legal name to add to the advisors in SIBs in Australia on top of their UK experience.
The debate over fixing a state budget crisis with SIBs is one we hope catches on in European municipalities and counties where debt management is often poor and budget management a great deal worse!
Law firm Allen & Overy has announced that it has advised Social Ventures Australia on their $7 million Social Benefit Bond (SBB), issued earlier this year.
The SBB is the first of its kind in Australia, and will fund the UnitingCare Burnside Newpin Program which works with Australian children living in foster care to return them safely to their families.
Allen & Overy’s association with Social Ventures Australia comes after the international law firm advised on a similar bond program in the United Kingdom.
Proceeds from Social Finance Limited’s Social Impact Bonds were used to fund prisoner rehabilitation programs in the UK. In bother the UK and Australian models, returns are dependent on the program meeting certain goals.
Ideally, social impact bonds, also known as pay-for-success bonds, allow local and state governments to receive more financing to innovate and expand successful programs. For investors, the bonds offer an opportunity to provide better returns in a low-rate environment and a chance to fund programs that benefit their communities.
Cities and state governments are still strapped for cash. According to the Center on Budget and Policy Priorities, while state governments’ revenues have improved recently, reserves need to be replenished and program funding remains below pre-recession levels. The National League of Cities reports American cities have experienced annual revenue declines in their general funds since 2006. Could social impact bonds help governments fill these budget gaps, especially in hit-hard areas like education?
Social Impact Bonds (SIBs) are an exciting innovation in results-based development financing. It’s particularly exciting in terms of how it might reshape how governments fund new approaches to stubborn social issues. The Development Impact Bonds Working Group over at the Center for Global Development recently released a report on SIBs in the context of international development.
The thing is, there is almost no one actually doing this in the developing world market. Almost no one. The one group I know of actually doing this in the field is Instiglio. Founded by a brilliant group of fellow Harvard MPA/ID graduates, Instiglio is working to use SIBs to improve social services in developing countries. I’ve met with several of the founders in Colombia where I was based for a few years and where they are working with local government to finance innovative approaches to school dropouts and adolescent pregnancy. I’m very impressed with them and their work.
The Webinar will take place on July 10 at 9 AM EST / 3 PM CEST.