World first crowdfunded social impact bond launches
13 January 2021 at 5:44 pm
Advocates hope to raise almost $300,000 for the program through crowdfunding
An Israeli social enterprise is utilising the power of crowdfunding to raise capital for a new social impact bond that will tackle loneliness in elderly people.
While social impact bonds (SIBs) – which link the funding of a project to its impact on society – are usually solely funded by large investors, this SIB is believed to be the first in the world to use crowdfunding.
Anchor investors and philanthropic funds have already contributed NIS 1.6 million (A$653,000) for the SIB, but advocates hope to raise another NIS 700,000 (A$285,000) through a crowdfunding campaign.
The organisation behind the SIB, Social Finance Israel (SFI), says the program is expected to help 200 people in Tel Aviv over two and a half years, aiming to reduce loneliness, improve quality of life and give seniors the tools to reconnect with the community.
SFI CEO Yaron Neudorfor said it was great to involve the community in the funding of the program.
“I am excited to enable everyone to invest in a social impact bond to reduce elderly loneliness and thus, address not only a difficult problem which has intensified recently but also, get a return on the investment subject to the project’s success,” Neudorfor said.
“Impact investments around the globe are continuing to grow since we are witnessing a new generation of investors that want more than a return; they want their investments to be meaningful according to their values.”
As part of the SIB program, called New Era, social workers and volunteers will visit the elderly and cognitive behavioural therapy tools will be used.
Seniors will also be put into group activities and helped to use technology that can connect them with friends and family.
The SIB has been launched amid concerns about the wellbeing of seniors in Israel during the coronavirus crisis.
A recent Israeli survey found that 47 per cent of elderly respondents were in a poor mental state, suffering loneliness, depression and feelings that “in the current situation, life has no meaning”.
Tel Aviv Foundation is a partner in the project and CEO Dr Hila Oren said this was an important issue to address.
“COVID-19 has presented new challenges and intensified other challenges – among others, the subject of elderly loneliness,” Oren said.
“As an entity that leads innovative urban thought and activity, we are happy to partner with SFI and create innovative financial tools that will contribute to… the elderly and Holocaust survivors, [which will be our main focus] specifically.
“Urban challenges of the 21st century require financial solutions of the 21st century.”