PDF Investment Funding, Martin Rich, Social Finance Ltd and Tim Jones, Allia

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Martin Rich will explains why the Social Impact Bond is a highly innovative funding tool that has captured the imagination of many and Tim Jones demonstrates how the Charitable Bond is a …

Martin Rich will explains why the Social Impact Bond is a highly innovative funding tool that has captured the imagination of many and Tim Jones demonstrates how the Charitable Bond is a straighttforward tool that releases funds for Charities.

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  • 1. Charity Finance Directors’ GroupSocial ImpactBondsMartin Rich – Social Finance
  • 2. Overview of Social Finance• Social Finance is an FSA regulated, non‐profit organisation• We are a team of bankers and social sector specialists.  We  believe that if social problems are to be tackled effectively,  successful organisations seeking to solve them need  sustainable revenues and investment to enable innovation  and growth• Our role is to devise the financial structures and raise the  capital to enable this to happen
  • 3. Financing better outcomes - theproblem Fewer  resources  available for  early  interventions Poorer social  Higher level of  outcomes – spending on  more requiring  crisis  crisis  interventions interventions
  • 4. Financing better outcomes - thesolution? SOCIAL  Money to  IMPACT  invest in early  BONDS interventions Lower  spending on  More early  crisis  interventions interventions Better social  outcomes,  fewer  individuals  needing crisis  interventions
  • 5. Social Impact Bond Mechanism Returns  dependent on  Payments  outcomes based on  Social Impact  defined Investors Government outcomes  Partnership Initial  investment Reduced social  issue Service Providers Reduced costs to  Government Services Wider benefits to  society Flow of funds Target population
  • 6. The Peterborough Scheme % of cost  savings from  Ministry of  Investors reduced re‐ Justice offending £ 5 million Social Impact Bond Reduction in  re‐offending Ongoing operating funding Other  St Giles Trust OrmistonTrust YMCA Interventions Support in prison,  Support to  Providing a  Support needed  at the prison gates  prisoners’ families  community base by the prisoner, in  and in the  while they are in  prison and the  community prison and post  community.  release Funded as the  need is identified 3,000 male prisoners  sentenced  to less  than 12 months
  • 7. What is needed for an effective SIB?• Clearly defined target group Stakeholders need to trust an objective and outcome metrics mechanism for assessing and agreeing the extent to which outcomes are achieved• Controls to mitigate external To ensure that outcomes are attributable to factors the success of the interventions, not factors outside of their control• Reward schedule that avoids Encourage service providers to work with perverse incentives the entire target population rather than just on “quick wins” and ensure that investors are rewarded for all the value they create• Value-based rather than cost- Encourage development of more cost- based reward payments effective outcome delivery models
  • 8. ContactMartin Rich, DirectorSocial Finance Ltd131-151 Great Titchfield StreetLondonW1W 5BBT: 020 7667 6379E: martin.rich@socialfinance.org.uk