Queensland Launches First Social Benefit Bond

Social Ventures Australia (SVA) has launched Queensland’s first social impact bond, seeking private capital to address social issues around out-of-home care in a spin-off of to the successful NSW Newpin bond.

SVA hopes to raise $6 million to fund a program to reunite children in out-of-home-care in Queensland with their parent or parents, targeting returns for investors of 7.5 per cent per annum linked to the success of the program.

“This builds on the success of the NSW Newpin Social Benefit Bond, which has been generating strong social and financial returns since its inception,” SVA CEO Rob Koczkar said.

The bond will be known as the Newpin Queensland Social Benefit Bond (Newpin Qld SBB).

“SVA is seeking to raise $6 million to fund the Newpin program that will be delivered by UnitingCare Queensland, which aims to reunify children in out-of-home-care in Queensland to their parents. Given the overrepresentation of First Australian children in the out-of-home-care system in Queensland, this will be a focus for the program,” Koczkar said.

“Investor returns will be linked to the number of children successfully reunited with their families through the program. The Newpin Qld SBB is targeting returns of 7.5 per cent per annum and expects to close by 30 June 2017, prior to the commencement of the program in late 2017.”

Koczkar said the minimum subscription was $50,000.

“Newpin is an 18-month program that is designed to strengthen family engagement. It will be delivered by health and community service provider UnitingCare Queensland in three locations, with the first pilot commencing in Cairns in 2018,” he said.

“The centres will be attended by both the parent and the pre-school aged children at least twice weekly to undertake parenting modules, therapeutic group meetings, and child development activities. Approximately 200 parents, with approximately 560 children, will be referred to the program over the course of five years.”

Koczkar told Pro Bono News he expected the bond issue to be finalised before the end of the financial year.

“We have been encouraged by the response we have received in social impact bonds and other impact investing ideas we have taken to investors all across Australia. I would expect there to be interest not just in Queensland but in other parts of Australia in this social impact bond I am very confident we can find a home for the $6 million,” he said.

“Since launching the first Australian social impact bond in 2013, we have seen considerable momentum in this space as demand grows for innovative ways to finance the solutions to challenging social problems.

“This is a high impact investment opportunity which aims to generate a competitive financial return while creating a lasting difference in the lives of vulnerable children and their families,” he said.

According to SVA, currently more than 9,000 Queensland children are living away from their parents in either foster care, kinship care or in a residential service.

“It is widely acknowledged that, where it is safe to do so, supporting children within their family is highly advantageous to their health and wellbeing. As well as a heavy social burden, out-of-home-care imposes a significant financial cost. In 2014/15, the Queensland government spent an average of $50,000 on each child in out-of-home-care,” Koczkar said.

Queensland treasurer Curtis Pitt said in a statement: “Working in collaboration with the social service sector, investors and across government, we can together achieve positive social outcomes and to address the most pressing social challenges, the Queensland government is looking at innovative approaches to service delivery.”

UnitingCare Queensland CEO Anne Cross said: “We are passionate about supporting people to be the best they can be – people from all walks of life, who live in many different locations. With statistics showing Aboriginal and Torres Strait Islander children nine times more likely to be in out-of-home-care than a non-Indigenous child, the time for change is now.

“The Newpin Queensland program has the potential to deliver real change for children and their families, particularly Aboriginal and Torres Strait Islander children living apart from their parents. We will partner with local Aboriginal and Torres Strait Islander communities, empowering them to lead the development, implementation and delivery of key components of the program.”

Koczkar said SVA had already achieved strong results with the Newpin SBB in NSW which is currently in its fourth year.

“The Newpin SBB has successfully restored 130 children to the care of their parent [or parents], and delivered a return of 12 per cent per annum to investors over a three-year period to 30 June 2016,” he said.

“Every time we do a bond it’s done in consultation with the government and the service provider and builds on the work that has been done previously and so in NSW the outcome measure is a restoration rate and in Queensland it is the number of children restored to families.

“Now Queensland NSW and South Australia which have or have had bonds in the market and in Victoria they are in the process of establishing a bond and we understand that there are discussions with the government in WA that this is an area that they are looking to explore. I think most states in Australia are pursuing this with some vigour.”

In March 2017, SVA and the South Australian government announced the country’s first social impact bond targeting homelessness after raising $9 million in less than a month.

The aim of the SA bond is to use a combination of private sector capital and not-for-profit expertise to support participants with three years of accommodation, case management, pathways to employment and life skills development, with the aim of reducing homelessness while providing returns to investors.
In July 2016 the Victorian government announced its first two social impact bonds focusing on reducing disadvantage through drug and alcohol treatment programs, and young people transitioning from out-of-home care.