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Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
Ryan Short from Genesis Analytics
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Ryan Short from Genesis Analytics

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Ryan Short presents on social impact bonds

Ryan Short presents on social impact bonds

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  • 1. An introduction to Social Impact Bonds Making CSI Matter Conference 2014 Ryan Short Genesis Analytics 3 June 2014
  • 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. Table of Contents What is a SIB? International experience SIBs in the South African context Discussion
  • 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. 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. 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. 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. 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. 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. 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. Discussion 10 • Points of clarification • The South African context – Challenges – Opportunities – Examples
  • 12. Contact details Ryan Short Partner ryans@genesis-analytics.com 011 994 7000 082 349 0030

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