The document summarizes lessons learned from establishing the first social impact bond (SIB) in Estonia in 2015. The Good Deed Foundation implemented the SIB to reduce recidivism among 14-17 year olds using aggression replacement training. Key lessons included selecting an intervention with available data and multi-actor competencies; considering service provider capacity, impact measurement experience, and sustainability; structuring investments for low volumes and high risk; establishing a detailed impact framework; and developing early legal and procurement frameworks for multi-year commitments.

1. Setting up a SIB in Estonia
Lessons learned by the Good Deed Foundation
Joanna Hofman, RAND Europe
31 May 2016

2. 2
About the SIB Estonia
2015 project
• Implemented by the Good Deed
Foundation in Estonia
• Funded by the EC through the EaSI
programme in 2014-2015 as one
of pilot projects that supported
the development of the market for
social enterprise finance
• Reported lessons learned to RAND
Europe that was tasked to
document experiences and share
learning among the pilot projects
and a wider audience

3. 3
Project objective and activities
Set up and prepare the successful launch of the first SIB in Estonia in 2015
through:
1. Introducing SIBs as a model to private investors and state actors
2. Analysing and comparing existing research on potential applicable problems for SIB in
Estonian social policies
3. Analysing the supply side of the SIB
4. Negotiations with interested stakeholders and selecting the problem area
5. Analysing and designing the impact measurement system
6. Disseminating information among suitable social enterprises
7. Preparing legal documents and frameworks
8. Signing the agreements to set up the SIB
9. Disseminating information

4. 4
Reoffending among
adolescence
• Age group: 14-17 year olds
• Intervention: Aggression
Replacement Training (ART)
Figure 1: ART logic model
Source: GDF (2015b) adapted from EPIS Center (n.d.)

5. 5
Seven critical areas where lessons were
learned and shared (credits: GDF)
1. Mapping and selecting a problem area for SIBs:
– Availability of data required
– Implementation of a model that falls under competencies of multiple actors
2. Mapping interventions:
– Risk appetite (preference for evidence-based interventions over experimentation
among state actors)
– Exit strategy (sustaining the intervention and its quality after the SIB contract ends)
3. Mapping and selecting service providers
– Timing the launch of a SIB in the market with a limited number of eligible service
providers (simultaneous implementation of EU-funded projects/programmes)
– Experience in impact measurement

6. 6
Cont. (credits: GDF)
4. Mapping investors
– Low investment volumes
– High risk awareness
5. Impact framework
– Creating a detailed protocol for impact measurement
– Establishing target levels (for reduction of reoffending)
– The cost of impact measurement
6. Legal framework
– Multi-year budgetary commitments for state actors
– Early development of legal framework and preparation of a public procurement
procedure

7. 7
Sources / credits:
• GDF (2015a). Final technical implementation report
• GDF (2015b). Feasibility study on implementing Social Impact Bonds in
Estonia
• EPIS Center (n.d). ART Logic Model. Accessed at:
http://www.episcenter.psu.edu/sites/default/files/ebp/ART_Logic_Model.
pdf (01.06.2015)
• Tallinn Estonia, photo by TausP. (Creative Commons)
• Don´t let it happen again, photo by Pablo Fernández (Creative Commons)