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Social Impact Bonds in Nova Scotia An Innovative Approach to Complex Social Issues January 2 nd , 2013. Setting the Context. In October, the Minister of Finance asked a Working G roup to perform research on Social Impact Bonds; including: E xisting examples world wide
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An Innovative Approach to Complex Social Issues
January 2nd, 2013
Arthur Bull, Chris Payne , Joanne Macrae, Mike Kennedy, Kathryn Morse, David Upton
From the jobsHere strategy:
Social enterprises play an important role in Nova Scotia’s economic prosperity.
Work will be done to improve access to capital and small-business support
programs for social enterprises while developing a better understanding of
their impact in the province.
Social Enterprise- businesses or organizations operated for the purpose of tackling social, economic, or environmental challenges (Social Enterprise in Nova Scotia – February 2011).
Social Finance is an approach to managing money that delivers social and /or environmental benefits, and in most cases, a financial return. (Social Finance)
Social Impact Bonds are a multi-stakeholder partnership in
which philanthropic funders and impact investors—not governments—take on
the financial risk of expanding preventive programs that help poor and vulnerable people (McKinsey)
Here is a short video that explains how Social Impact Bonds (SIBS) work:
An Introduction to Social Impact Bonds
Responsive and participatory interface between citizens and stakeholders.
Provides objective independent oversight and measurement of whether outcomes have been achieved.
Government department or agency
Defines outcome to be pursued.
Contract for achieving outcomes, including rate of return for achievement of outcomes.
If outcomes are achieved,
Gov. issues payout to investors.
Administers relationship between Gov. and service delivery organization, raises investment capital.
Intermediary determines appropriate service delivery organization.
Investors provide start up capital to intermediary.
Service delivery organization(s)
Delivers outcome specified.
Provides investment in exchange for payout based on achievement of outcomes.
It is essential that any and all partners selected are subject to a timely, open, and transparent procurement process.
The first Social Impact Bond pilot was launched with the Ministry of Justice, in Peterborough United Kingdom; aimed at reducing re-offending, by working with short term male offenders This six year program began in August of 2010 and is the model for all of the other initiatives being launched in Australia and North America
Other Areas of Interest
Drugs - Improve recovery from drug addiction, thereby improving life chances for the children of addicts and reducing crime
Children and Young People at Risk- Reduce the time that children spend in care and improve their general wellbeing (such as education outcomes)
Women in the Criminal Justice System- Reduce women’s reoffending and divert low risk female offenders away from custody
Health- An SIB model to reduce the number of emergency hospital admissions. is currently being researched
The following Departments have been asked to provide ideas for potential pilot programs:
The Working Group has developed Criteria to assist in evaluating appropriateness of potential projects…(More in depth criteria and drill down questions can be found at Appendix A)
Is this an issue that is clearly defined and going unaddressed or under addressed?
Will we be able to effectively measure the impact of the intervention relative to the status quo on social and financial levels?
Will the approach proposed deliver greater value for money than alternative means of meeting the outcome or the status quo?
Is a social impact bond the appropriate delivery mechanism for delivering optimal outcomes given current service delivery environment?
Can we measure the net cost savings related to the intervention and are they sufficient to provide a reasonable return for investors?
Are there appropriate parties in place to fill the roles of Intermediary, Service Delivery Organization(s), Investors and Evaluators?