framing pay for success social finance is authorised and regulated by the financial conduct...
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FRAMING PAY FOR SUCCESS
Social Finance is authorised and regulated by the Financial Conduct Authority FCA No: 497568
28 MARCH 2014
Toby Eccles, Founder & Development [email protected]
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CASE STUDY: RE-OFFENDING RATES IN THE UK
RECONVICTION RATE WITHIN 1 YEAR
AVERAGE NUMBER OF PREVIOUS
OFFENSES
AVERAGE NUMBER OF PREVIOUS JAIL
TERMS
63% 43 7
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PETERBOROUGH SIB MODEL 3
INVESTORS
£5 million
SOCIAL IMPACT PARTNERSHIP
3,000 male prisoners sentenced to less than 12 months
Reduction in re-offending
MINISTRY OF JUSTICE/
BIG LOTTERY FUND
Payment based on reduced convictio
ns
St. Giles Trust
Other Interventions
Return depends on
successHMP
PETERBOROUGH
Ormiston Trust MIND SOVA
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GLOBAL ACTION ON IMPACT BONDS HAS SURGED
US
• 3 SIBs, including a US$27m SIB, for high risk youth, early childhood education and recidivism by Goldman Sachs and others
• One SIB on recidivism by New York State, Merrill Lynch, Social Finance US and others
• Harvard Lab providing technical assistance to 9 state governments
UK
• 14 SIBs for issues that range from recidivism to homelessness by UK government, Social Finance and others
G8 Taskforce on Social Impact Investment
• Focused on developing policy to scale solutions such as impact bonds
Australia
• 2 SIBs on out-of-home care by New South Wales State, Social Ventures Australia and others
Uganda
• Rhodesian Sleeping Sickness DIB by DfID and Social Finance
Swaziland
• HIV prevention DIB by CHAI and Social Finance
The Netherlands
• One SIB on youth unemployment by Rotterdam City, ABN AMRO and others
South Africa
• BDS bond by Bertha Center, Social Finance and others
Social Impact Bonds launched Development Impact Bonds under exploration / development Market infrastructure established
Mozambique
• Malaria DIB by Nando’s, Dalberg and others
Outcomes Funds
• £20m UK fund
• White House proposal for US$300m fund
Specialist intermediaries• 6 organizations with
a core focus on bonds
• Organizations in at least 10 other countries exploring impact bonds
Latin America
• IDB’s MIF launching US$5.3m facility to support SIB ecosystem building and pilot SIBs
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RIGOROUS INVESTIBLE
CLIENT-CENTEREDPARTNERSHIPINNOVATION
HOW SIBS CAN ADD VALUE
FLEXIBLE
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FOCUSING ON ADAPTIVE MANAGEMENT
DATA COLLECTION & ANALYSIS
IMPACTBETTER PERFORMANCE MANAGEMENT &
RESULTS DELIVERY
FLEXIBLE CONTRACT
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FREEING UP SERVICES TO BE BETTER
• Serving the funder
• Checking receipts
• Feedback from regulators & politicians
• Ensuring services stay the same
• Serving the user
• Checking results
• Feedback from service users & impact measurement
• Ensuring services improve
FROM TO
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SHIFTING FROM “BUSINESS AS USUAL”
Measuring social outcomes
Designing flexible contracts
Valuing social outcomes
Evaluating risk transfer
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NOT LOSING SIGHT OF THE SOCIAL CHANGE
Focusing on service usersMeasuring program
effectiveness
Crystalizing value to government
Facilitating investmentPromoting flexibility for
adaptation
Having pressure to improve
Program System
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YOUR QUESTIONS
?
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Contact details
Twitter@socfinuk@tobyecc
Websocialfinance.org.uksocialfinanceus.org
©Social Finance 2014
PETERBOROUGH SIB MODEL 11
INVESTORS
£5 million
SOCIAL IMPACT PARTNERSHIP
3,000 male prisoners sentenced to less than 12 months
Reduction in re-offending
MINISTRY OF JUSTICE/
BIG LOTTERY FUND
Payment based on reduced
convictions
Providing specialized support pre- and post- release to
high/medium risk clients
St. Giles TrustSupport needed by
the prisoner, in prison and the
community. Funded as the need is
identified
Other Interventions
Return depends on
success
HMP PETERBOROUGH
Support to prisoners’ families while they are in prison and post
release
Ormiston TrustLow level mental health support to
prisoners while they are in prison and
post release
MINDProviding volunteer
support pre- and post- release to low
risk clients
SOVA
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©Social Finance 2014
SHIFTING FROM “BUSINESS AS USUAL”
Measuring social outcomes as opposed to focusing solely on outputs & service delivery
Designing flexible contracts to enable interventions to adapt to lessons learned
Valuing social outcomes based not only on estimates of cost-savings but also on value to society
Evaluating risk transfer from the public to private sector and where it adds most value