Charity Issues Bank-Backed Social Benefit Bond

The Benevolent Society has launched a $10 million Social Benefit Bond to fund an intensive family support service in the first bank-backed issue of a Social Benefit Bond in Australia.

The Benevolent Society, in partnership with Westpac and the Commonwealth Bank, has launched the $10 million Social Benefit Bond to fund an intensive family support service for up to 400 families over five years.

The Benevolent Society’s General Manager of Business Development Steve Hawkins said the Social Benefit Bond would unlock new funding to invest in reducing the number of children needing to enter foster care.

“We know governments only have so much money to go around, but we also know there are a lot of people out there looking to invest in projects that will change lives – so this Social Benefit Bond is a real win-win,” Hawkins said.

“Essentially, our Social Benefit Bond will provide investment returns based on reducing the cost to government of pressing social issues.

“With foster care costing up to $66,000 a year, when we can show our service is successfully keeping children safe and reducing the number entering foster care, our investors will receive a financial return,” he said.

“This type of financing encourages discipline in the reporting of social outcomes, which means greater transparency for taxpayers, and also creates an asset class which does not require a choice between being a philanthropist or an investor.”

The Benevolent Society’s CEO Anne Hollonds said the Social Benefit Bond was fundamentally about supporting families.

“While this is an exciting new way to finance our work, what’s most important is turning lives around and reducing the growing number of Australian kids who can’t live with their families,” Hollonds said.

“The vast majority of parents want the best for their children, but some need extra help to create a safe home where their children can thrive – especially if they never had that chance in their own childhoods.

“This Social Benefit Bond will allow us to work with up to 400 families who recognise they need to change and want to put their children first and help them develop the skills they need to safely raise thriving kids.“

Westpac Institutional Bank’s Executive Director and Head of Structured and Asset Finance, Craig Parker, said this first bank-backed issue of Social Benefit Bonds in Australia placed NSW at the leading edge of global developments in this financing sector.

"Westpac is proud to be involved in this essential venture with our partners and the NSW Government. Helping to find smart solutions to pressing social needs such as this is a most satisfying endeavour for everyone concerned and reinforces Westpac’s position as a global leader in sustainability,” Parker said.

According to Simon Ling, Global Head of Debt Markets at the Commonwealth Bank, Social Benefit Bonds could potentially fill a significant funding gap as it is clear that government spending and philanthropic donations aren’t always sufficient to tackle the variety of social problems facing many Australians.

“From a Commonwealth Bank perspective, it’s great to bring our considerable resources, experience and depth of knowledge to this project, and structure one of the first Social Benefit Bonds in Australia. It very much aligns with our vision to excel at securing and enhancing the financial wellbeing of people, businesses and communities,” Ling said.

“There has recently been one Social Benefit Bond placed successfully with Australian investors, and we are hopeful that our transaction will be met with a similarly strong investor demand. We expect to be approaching a broad number of potential investors shortly,” he said.

In June 2013 Not for Profit organisation, Social Ventures Australia raised $7 million for Australia’s first social benefit bond. The private capital raised will fund UnitingCare Burnside’s Newpin program, which works with families to safely return children from foster care and reduces the number of children placed in out-of-home care. 

Described as Australia’s first charity, the Benevolent Society is celebrating its 200th birthday in 2013. 

Interested investors in the Benevolent Society Social Benefit Bond can contact Craig Parker, Executive Director, Head of Structured and Asset Finance, Westpac Institutional Bank on 02 8254 9116 or cparker@westpac.com.au

For more information, visit www.benevolent.org.au or check out Steve Hawkins' youtube clip.