Australia’s First Social Benefit Bond Going Strong

Australia’s first social benefit bond Newpin has reported positive results for the third year in a row, restoring 130 children in care to their families and preventing 47 children from entering the system.

This year the number of children returned to their families was almost double the bond’s second year results.  

The Newpin bond is a financial partnership between the NSW Government, Not for Profit Uniting, and Social Ventures Australia (SVA).

SVA raised $7 million from investors to run the seven-year program that works with parents who have had their children removed from their care, or whose children are at risk of removal.

“Newpin’s success reflects the experience and the expertise of the highly professional team that Uniting has at a growing number of Newpin centres around New South Wales,” SVA’s executive director of impact investing Ian Learmonth told Pro Bono Australia News.

“It also reflects the advantage of having seen a pre-existing program which informed expected outcomes and was helpful in how we set up the investment structure of the SBB itself.”

The bond will also pay a return to investors of 12.15 per cent per annum, up from 8.9 per cent in the second year and from 7.5 per cent in the first.

Learmonth said Newpin’s success was “very encouraging” for impact investing more broadly.

“It shows that you can combine positive social outcomes with a reasonable financial return, and that those two objectives can sit side by side,” he said.

“Investors will no doubt be encouraged by the financial returns, of course, of the Newpin SBB over the first three years, and it will be helpful in raising capital for bonds in the near future – there are a number of those that are underway at varying stages across the country.”

He also said the social outcomes were strong compared to the control group estimates.

“Under the Newpin program, the control group, or counterfactual, for the first three years was an assumed 25 per cent restoration for families who were not on the program – ie that 25 per cent of children would have been expected to be returned to their parents without the intervention of a program such as Newpin,” he said.  

“Whereas here, the restoration success has been, across the board, at 60.7 per cent, so more than twice as successful as the counterfactual which is very pleasing.”

Uniting’s children’s advocate Claerwen Little said with the right support, innovative approaches could achieve positive results for families.

“Newpin equips parents with an understanding of their children’s emotional, physical and educational needs and of how their own behaviours impact their children,” Little said.  

“It takes hard work and commitment from parents to overcome their challenges, most often stemming from their own early experiences of trauma and abuse.”