NSW Signs Australia’s First Social Benefit Bond
Wednesday, 27th March 2013 at 9:49 am
The NSW Government has signed a contract with UnitingCare Burnside for Australia’s first Social Benefit Bond.
The Social Benefit Bond allows investors to direct their funds to a social program that improves outcomes for vulnerable families, while also providing the investor with a share of anticipated savings to taxpayers.
If the social program is effective and reaches pre-set targets, the investor is repaid their principal plus an agreed return, which is based on performance and capped at 15 per cent.
The first $7 million Social Benefit Bond will fund UnitingCare Burnside’s New Parent and Infant Network (Newpin) program that works intensively with struggling families to keep them safely together.
The NSW Government says the $7 million Social Benefit Bond trial is a bold new way of improving services and lives through increased investment into the child protection system in NSW while at the same time providing long-term social and economic benefits for the state.
“Not only are we tapping into a new source of funding by partnering with social investors, but we have the potential to create better social results, while providing cost savings for the NSW Government and delivering for investors,” NSW Treasurer, Mike Baird said.
Director of UnitingCare Burnside, Claerwen Little said the Newpin Social Benefit Bond will enable the expansion of a program with a strong track record in safely restoring children in care to their families.
“We welcome this partnership as an exciting way to grow programs that improve outcomes for those in greatest need of support,” she said.
Social Ventures Australia will market the bond to potential investors. It is expected that the $7 million in capital will be raised by 1 July.
The NSW Government launched the pilot tender process for "Social Benefit Bonds" – taking up the idea first considered by the former Labor Government – in September 2011.
The NSW Government says it is continuing its positive negotiations with the other preferred proponents for additional Social Benefit Bonds in the areas of family preservation and re-offending.
It says if successful, it’s expected that these Bonds will be implemented later this year.