A panoply of interesting reading today. Naturally there remains a lot of scepticism about SIBs from the incumbents grant recipients of government / charity largesse but the attacks keep focussing on the micro, not the macro. The alternative is bankrupt government – that’s not feasible if we want to retain, well, a vestige of civilisation…
Mixed Messages On SIBs
On 20 June, UK charity think tank NPC published a new paper on the future of social impact bonds. Opportunities and Lessons argues that charities are well placed to exploit specialist knowledge in some areas of service delivery, and to influence the way social impact bonds (SIBs) are developed and used in the future. While facing a number of hurdles, charities should seriously consider working alone or in coalition to develop their own SIB proposals, and direct government policy towards delivering more effective interventions on behalf of beneficiaries.
Providers remain positive about the potential of SIBs even after recent poor publicity and the cancellation of the £5 million Peterborough SIB established to try and rehabilitate male ex-prisoners, says NPC. ‘It isn’t for the faint-hearted, but there is a big prize for charities, government and society as a whole if they get it right.’
Click here to download Opportunities and Lessons: Perspectives from providers of Social Impact Bonds.
But two articles by Rick Cohen of Nonprofit Quarterly present a more sceptical picture from the other side of the Atlantic. In an article called Eight States Reduce Recidivism without Social Impact Bonds, Cohen refers to a Council of State Governments report documenting ‘the very promising efforts of eight states … that have actually achieved reductions in recidivism between 2007 and 2010. The distinction between these eight states and the two states that are pursuing recidivism-reduction programs with the help of SIBs (New York and Massachusetts),’ he continues, ‘is that the CSG is documenting system-wide, statewide reductions in recidivism as opposed to project- (or prison-) specific efforts. According to the June 2014 report, “compelling evidence is now emerging that shows that recidivism rates for an entire state can indeed change.”’
The title of the second article, Eight Sobering Thoughts for Social Impact Bond Supporters, speaks for itself.
Denver Homeless Initiative, Unveiled At CGI America, Uses New Model
Jon Murray – The Denver Post
A new $8 million program aimed at helping Denver’s chronically homeless — those with substance abuse and mental health problems — will make use of an unusual funding model.
Though it’s a program backed by the city of Denver and several partners, the supportive housing program won’t tap taxpayer money — at least not initially. Under the “social impact bond” model, investors will provide the money up front using a contract that commits taxpayers to repaying them later, but only if the effort saves the city money elsewhere.
Denver Mayor Michael Hancock announced the initiative on stage Wednesday afternoon on the final day of the Clinton Global Initiative America conference at downtown’s Sheraton, with former President Bill Clinton at his side. The Denver Post first reported Denver’s commitment Monday.
Rhode Island Union: Social Impact Bonds Are About Greed, Not Good
Jake Blumgart – Next City
Social impact bonds sound pretty great. What could be wrong with additional funds to help the poor, the homeless, the formerly imprisoned? Governments are cutting back, but need is greater than ever. So let Wall Street provide (while netting a fine payout in the process)? Rhode Island’s largest public employee union, AFSCME Council 94, isn’t buying that solution.
Big Society Capital Puts £1m Into Share Underwriting Scheme
Sam Burne James – Third Sector
The Community Shares Underwriting Fund was launched in 2012 by the social finance firm Resonance.
Big Society Capital will invest £1m in a share underwriting scheme for social investments in community projects, with a quartet of charities also pledging investments totalling £500,000.
In addition, BSC said it could double its commitment to the Community Shares Underwriting Fund if demand was high in the next 12 months.
The other four charities supporting the CSUF are the Barrow Cadbury Trust, the Friends Provident Foundation, the Golden Bottle Trust and Panahpur.