SOURCE: Social Finance

Social Finance

July 06, 2016 09:00 ET

60 Social Impact Bonds Across 15 Countries Show Growing Global Reach

22 Social Impact Bonds Have Posted Results Since First Launch in 2010

LONDON, UNITED KINGDOM --(Marketwired - July 06, 2016) - The Social Finance Global Network yesterday launched its latest white paper, Social Impact Bonds: The Early Years.

Key highlights of the report:

  • 60 Social Impact Bonds have launched in 15 countries, raising more than $200m in investment to address social challenges.
  • 22 projects have posted results, 21 of which have posted positive outcomes for beneficiaries.
  • 12 projects have made outcomes payments and 4 Social Impact Bonds have repaid investors in full with a return on their investment.

The white paper reflects the shared lessons from the Social Finance Global Network, across sister organizations in the UK, US and Israel -- which, together, represent the largest pool of Social Impact Bond expertise globally, across multiple jurisdictions.

In 2010, Social Finance pioneered the Social Impact Bond, an innovative public-private partnership model that aims to measurably improve the lives of people most in need by driving resources towards better, more effective programs. Six years later, Social Impact Bonds have gained significant global momentum.

The report details the results of 22 Social Impact Bonds, the global growth of the model, challenges faced, and thoughts on developments and trends for the future.

David Hutchison (Social Finance UK), Tracy Palandjian (Social Finance US), Yaron Neudorfer (Social Finance Israel) said,

"Together the report and the database chart the strong global growth of Social Impact Bonds, providing insight into the diversity and variance in the way they have been used. We hope that these resources will foster collaboration and the sharing of information to advance the market, and to deliver greater impact among the communities we aim to support."

Alongside the paper, Social Finance is also launching its live global database of Social Impact Bonds. The database can be sorted by country, issue area, investor, payor and service provider, providing a comprehensive overview of Social Impact Bonds launched to date and a snapshot of the many in development. The database can be sorted by country, issue area, investor, payor and service provider, providing a comprehensive overview of Social Impact Bonds launched to date and a snapshot of the many in development. This is an important open platform for the community of global practitioners and others who are actively following this rapidly evolving field. User input will be critical to develop this living, collaborative resource.

Jane Newman, International Director at Social Finance UK, said

"This easy-to-use, live platform will be an invaluable source of information for policy makers and social investors, as well as service providers, charities and the community of stakeholders that are now working in the field. Not only does it create a visual representation of the growing global reach of the Social Impact Bond market, it brings together in one place a picture of deals launched and in development."

With new projects and results announced weekly, the Social Impact Bond market is in a phase of exciting growth. The report published today is a snapshot of its development so far, while the database will chart future growth as the field expands. These resources allow a focus on the purpose and potential of Impact Bonds in bringing high-quality services to people in need around the world.

Notes to Editors:

  1. The report and the online database will be available on 5 July. www.socialfinance.org.uk/sib-white-paper and www.socialfinance.org.uk/database
  2. A Social Impact Bond is a public-private partnership which funds effective social services through a performance-based contract. Social Impact Bonds enable governments to partner with high-performing service providers by using private investment to develop, coordinate, or expand effective programs. If, following measurement and evaluation, the programs achieve predetermined outcomes and performance metrics, then the outcomes payor repays the original investment. However, if the programs do not achieve their expected results, the payor does not pay for unmet metrics and outcomes.
  3. A note on terminology: Social Impact Bonds are also known as Pay for Success projects in the US and Social Benefit Bonds in Australia. For the purposes of the paper, we use the term 'Social Impact Bonds' to cover all national variations.
  4. Social Finance UK will also be hosting a filmed discussion between David Hutchison (Social Finance UK), Tracy Palandjian (Social Finance US), Yaron Neudorfer (Social Finance Israel) and Toby Eccles (Founder, Social Finance UK) on the challenges, impact and future of Social Impact Bonds on 5 July. The discussion will be available to view online on Wednesday 6th July.
  5. Social Finance is a global network of not-for-profit organizations that partner with governments, the social sector, and impact investors to ­find better ways of tackling social problems and improving the lives of people in need. We believe that everyone deserves the opportunity to thrive, and that social impact ­financing can play a catalytic role in creating these opportunities. Our offices in the United Kingdom, the United States, and Israel structure and manage innovative impact investments, including Social Impact Bonds, which mobilize capital to drive social progress.
  6. The database is currently in beta form and we are aware of a few glitches -- particularly the absence of Social Impact Bonds in development in the United States. For this jurisdiction, we will therefore solely report on launched projects.

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