SIBs a “Win-Win-Win” for NSW
Wednesday, 3rd April 2013 at 9:23 am
Australia’s first Social Impact Bond (SIB) has been described as a “win-win-win” for its home State of New South Wales.
The NSW Government signed a $7 million contract with UnitingCare Burnside to fund the New Parent and Infant Network (Newpin), designed to achieve social benefits by supporting children and young people in out-of-home care to be safely restored to their families or to prevent them from entering care.
The NSW Treasurer Mike Baird said that NSW is leading the way with announcing what is a first for Australia.
“We believe that this innovative approach has the potential to be a win-win-win for NSW,” Baird said.
“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.”
Social Ventures Australia will market the bond to potential investors and it is expected that the $7 million in capital will be raised by 1 July.
According to the NSW Government, the $7 million bond will initially fund four centres and pay for the expansion of UnitingCare Burnside’s Newpin program which says it aims to break the destructive cycle of family relationships that lead to abuse and restores children in care to their families.
“When Newpin achieves agreed social outcomes, such as safely restoring children in care to their families or preventing entry into care, this generates significant social and economic benefits,” a statement from the NSW Family & Community Services said.
“These benefits mean the Government needs to spend less on acute services and is able to spend taxpayers money helping families in other ways. The savings delivered by successful outcomes are used to pay back the investors’ up-front funding as well as provide a return to investors.”
Director of UnitingCare Burnside Claerwen Little said the Newpin Social Impact 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.
According to the Centre for Social Impact (CSI), a SIB is a multi-stakeholder partnership in which philanthropic funders and impact investors – not governments – take on the financial risk of expanding preventive programs that help poor and vulnerable people.
In 2010 the first Social Impact Bond was signed with the UK Ministry of Justice to provide a program to work with inmates of the Peterborough Prison who were soon to be released. The social program worked with them to reduce the likelihood that they would reoffend and end up back in jail.
“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,” Baird said.