Today we lead with a story discussing the first Belgian SIB which is addressing employment and training for young people.

Establishing Social Impact Bonds In Continental Europe
Thomas Dermine – Harvard University

On January 23 2014, with the support of the Brussels regional government, the management committee of the Brussels Employment Agency (i.e., Actiris) agreed to launch the first Social Impact Bond (SIB) in Belgium, a ground-breaking mechanism to fund social innovation. This event represents a landmark breakthrough as it is one of the first times a mechanism of Social Impact Bond is effectively implemented in continental Europe.

This publication traces the research efforts that have been led to support the effective launch of this first Belgian Social Impact Bond, from the identification of relevant social issues to the economic impact modelization of the mechanism.

According to the final agreement behind this first SIB in Belgium, an innovative social services provider (i.e., Duo for a Job) based in Brussels will receive funding from a consortium of social investors to finance its operations for 3 years. The social services provided will consist of intensive intergenerational and intercultural coaching to help unemployed young individuals from immigrant families to successfully reintegrate the Belgian job market.

After a period of 3 years, an independent evaluator will assess the success of the social services provided. Depending on the success of the program, investors will be reimbursed (or not) by the Brussels Employment Agency and will perceive a financial return that varies according to the social performance of the program. At all levels of social performance, the amount paid back by the Brussels Employment Agency to the investors is only a marginal proportion of tax-payer money savings generated by the program (i.e., reduced unemployment benefits and increased tax revenues).

Our experience in Belgium demonstrates that SIBs can be valuable instruments for European governments. SIBs are not stand-alone solutions to address European social issues but they can be an effective way to reduce financial risks for public actors to test innovative approaches and to unleash the potential of social entrepreneurship.

Our experience in Belgium demonstrates that SIBs can be valuable instruments for European governments. SIBs are not stand-alone solutions to address European social issues but they can be an effective way to reduce financial risks for public actors to test innovative approaches and to unleash the potential of social entrepreneurship.