An introduction to Social Impact Bonds
Making CSI Matter Conference 2014
Ryan Short
Genesis Analytics
3 June 2014
About Genesis
Genesis is a development economics consultancy. We work with governments, donors and private sector on
econo...
Table of Contents
What is a SIB?
International experience
SIBs in the South African context
Discussion
‘Traditional’ social investment
3
INVESTORS
$
SERVICE
PROVIDERS
$
BENEFICIARIES
THE STATE
• No financial sustainability
• ...
The Social Impact Bond model
4
INVESTORS
$
SERVICE
PROVIDERS
$
BENEFICIARIES
OUTCOME
FUNDER
• Recycled capital
• Proportio...
Privatisation of social services
Complex and expensive model
No evidence of success (yet)
Outcomes-focused
Recycling of ca...
International experience
6
• First SIB launched in 2010 in the UK by Social Finance.
• Now more than twenty SIBs (raising ...
International experience
7
Key:
SIB Implementation
SIB Investigation
DIB Investigation
12
4
3
6
1
2
2
4
Homelessness,
unem...
SIBs comprise a number of critical components
8
Private monetary
investment at risk
Programme of
actions to improve
prospe...
The potential for SIBs in South Africa
9
Private monetary
investment at risk
Programme of
actions to improve
prospects of ...
Discussion
10
• Points of clarification
• The South African context
– Challenges
– Opportunities
– Examples
Contact details
Ryan Short
Partner
ryans@genesis-analytics.com
011 994 7000
082 349 0030
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Ryan Short from Genesis Analytics

  1. 1. An introduction to Social Impact Bonds Making CSI Matter Conference 2014 Ryan Short Genesis Analytics 3 June 2014
  2. 2. About Genesis Genesis is a development economics consultancy. We work with governments, donors and private sector on economic growth, poverty reduction, and solving developmental challenges. • Have partnered with Social Finance (UK) to develop the SIB concept in South Africa • Investigating use of SIBs in ECD, education, health, and business development services 1
  3. 3. Table of Contents What is a SIB? International experience SIBs in the South African context Discussion
  4. 4. ‘Traditional’ social investment 3 INVESTORS $ SERVICE PROVIDERS $ BENEFICIARIES THE STATE • No financial sustainability • No link between social and financial returns • No secure, multi-year funding • Limited flexibility • Poor understanding of outcomes • Poor at innovating • Monitoring and measurement often focused on inputs and/or outputs, rather than outcomes $ Focus on social returns. Limited sustainability.
  5. 5. The Social Impact Bond model 4 INVESTORS $ SERVICE PROVIDERS $ BENEFICIARIES OUTCOME FUNDER • Recycled capital • Proportional outcomes-based returns • Stable multi-year funding • Flexibility and innovation • Opportunity to test, prove and scale up intervention models • Cost saving • Low risk on innovation $ • Independent verification of outcomes • Proportional payment of outcomes-based returns (up to a cap) Sustainable social and financial returns.
  6. 6. Privatisation of social services Complex and expensive model No evidence of success (yet) Outcomes-focused Recycling of capital Win-win-win-win The major benefits and criticisms of SIBs 5 BENEFITS CRITICISMS The jury is still out, but indications are positive.
  7. 7. International experience 6 • First SIB launched in 2010 in the UK by Social Finance. • Now more than twenty SIBs (raising in total approximately US$100 million) have been launched around the world. • Significant funding has been set aside for SIBs by the UK and US government. – £60 million of funding allocated by the UK Cabinet Office and Big Lottery Fund, – proposed US$300 million allocation in the White House FY2014 budget. • In June 2013 the G8 Forum established the G8 Task Force for Social Investment, with the aim of exploring the potential of impact investment as a means to tackle significant social issues. • No SIB yet launched in the developing world.
  8. 8. International experience 7 Key: SIB Implementation SIB Investigation DIB Investigation 12 4 3 6 1 2 2 4 Homelessness, unemployment, youth outcomes, teenage pregnancy, malaria, sleeping sickness, HIV and TB, education, recidivism, family support services, workforce development and early childhood development.
  9. 9. SIBs comprise a number of critical components 8 Private monetary investment at risk Programme of actions to improve prospects of target group Commitment by government to make results-based payments SIB Robust outcome metric that can be measured and attributed to intervention Willing outcomes funder, investor and service providers Costs of intermediation can be absorbed Savings to the state that can be calculated Cost of intervention is small relative to potential public sector savings Clearly defined social problem and identifiable target group Clear social challenge to be addressed
  10. 10. The potential for SIBs in South Africa 9 Private monetary investment at risk Programme of actions to improve prospects of target group Commitment by government to make results-based payments Robust outcome metric that can be measured and attributed to intervention Willing outcomes funder, investor and service providers Costs of intermediation can be absorbed Savings to the state that can be calculated Cost of intervention is small relative to potential public sector savings Clearly defined social problem and identifiable target group Clear social challenge to be addressed ?
  11. 11. Discussion 10 • Points of clarification • The South African context – Challenges – Opportunities – Examples
  12. 12. Contact details Ryan Short Partner ryans@genesis-analytics.com 011 994 7000 082 349 0030
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