Social impact bonds at a glance, August 2017

Social impact bonds at a glance, August 2017

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  A Glance At: SocialImpact Bonds Written by Liat Zwirn [email protected] August 2017
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  Changes in thesocial impact field The social impact field has been enriched by new ideas and approaches, allowing it to do more with limited resources These new ideas include: • Double impact organizations Written by Liat Zwirn [email protected] • Double impact organizations • Adopting business practices • New financing models This presentation glances at one of the new financing models: social impact bonds
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  Social Impact Bonds (SiBs) • Financialinvestment in POC • 60 SiBs have been launched across the globe between The Scale Challenge • Increasing the number of stakeholders Brief overview Written by Liat Zwirn [email protected] • Financial investment in social issues • The initiative was launched in 2010 in the UK and spread from there • ROI depends upon measurable success globe between 2010-2016 • $200M+ have been invested • 90,000 + lives have been affected of stakeholders involved, across sectors as well as countries • Duplicating successful models • Promoting further innovation
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  The need Israel asan example Targeting social services, including education, social security, health, welfare etc. 9.96B ILS Israel’s 3rd sector budget2 142.1B ILS Israel’s government budget for social services- 20161 Written by Liat Zwirn [email protected] budget2 1. 2016-2015 Budget highlights – social services, Ministry of Finance 2. The 3rd sector in Israel is a lot smaller than you thought, Calcalist, 16/03/16 The social bonds model tries to achieve more with current financial resources, using the “paying for success” approach, and bridging the gap for failures with financial investment resources, a field with inherent risk social services- 20161 These resources are still insufficient
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  2010 2014 Historic highlights •The social bond concept is being invented in England • The propose of the first bond: help rehabilitate convicts • 26 social bonds have been issued across the globe Written by Liat Zwirn [email protected] 2013 2016 • G8 taskforce regarding social investment is established • Social Finance Israel is founded by Sir Ronald Cohen, in order to assist financing of social activities, with capital market financial instruments • Social Finance Israel creates and issues two social bonds in Israel • ~60 social bonds have been issued across the globe
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  Act Cost Measuring social issues costs Invest Financial Theprocess Plan Constructing a social impact Written by Liat Zwirn [email protected] Act Implementing social intervention plan and measuring Impact Financial investment in the bond ROI according to social performance on predefined metrics social impact bond
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  Mediators and Oversight* Investors •Business sector • Philanthropy • Private sector Investing for financial and social ROI The stakeholders Beneficiaries Bond’s social issues target audience Written by Liat Zwirn [email protected] Change Agents Mediators and Oversight* • Public sector • Social service enterprises Intermediaries such as a social finance investment enterprise *Optional Social enterprisers Acting to bring about social change Creating, managing and measuring impact of social investment financial tools Savings from reduced rate of social problems costs are directed towards ROI Multiple sources and integration
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  Attractive aspects Investors • Financialgains • Financial portfolio diversification • Social responsibility Potential financial gain, which is not correlated to the Beneficiaries • Intervention plan Access to a well defined, comprehensive and funded intervention plan Public sector • Paying for success • Social innovation • Awareness to social issues Funds are being efficiently allocated, as “payment” for Social Written by Liat Zwirn [email protected] correlated to the capital market, helping to diversify the financial portfolio while doing good “payment” for proven results. In addition, new sources of capital are being drawn to tackle social issues, as well as greater awareness Social Impact Social sector • Reliable, long- term funding to enable planning and implementation • Streamline work practices and process
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  Investment fields Written byLiat Zwirn [email protected] Source: 17 goals to transform our world, sustainable development goals, The United Nations
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  The investors US and Australia Rest of the world Private finance Philanthropy funds Socialimpact investors Written by Liat Zwirn [email protected] • Generally speaking, in these countries, investors were recruited from both the private and social sector • Many of the deals with the private sector have been underwritten either by guarantees or by tiered investment structures • Most funds have been secured from social sector entities • Some social impact investors have set up specific SiB funds. An example is Bridges Ventures, whose SiB fund has invested in 11 SiBs in the UK. Source: Social Impact Bonds: state of play & lessons learnt, OECD, 2016
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  Who provides the actual Service? TypeSize Mostly 3rd sector organizations Medium (50-250) to large Written by Liat Zwirn [email protected] And what do they think? Charities report high levels of satisfaction, since they are: • Provided for longer periods of time • Can focus on results • Are allowed more flexibility in the delivery model organizations to large (250+ employees) Charities Social enterprises Source: Social Impact Bonds: state of play & lessons learnt, OECD, 2016
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  15 countries 60 Social Impact 90,000+ lives Where do westand? 2010-2016 Effected by intervention plans funded Written by Liat Zwirn [email protected] $200M + countries Impact bonds The amount invested in social investment bonds Investing in employment, social care, recidivism and more Including the UK, USA, Israel and Australia Source: Social Impact Bonds – The early years, the Social Finance global network, 2016 plans funded by social bonds
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  Written by LiatZwirn [email protected]