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MEGHAN JOY, PHD CANDIDATE, POLICY STUDIES, RYERSON UNIVERSITY
DR. JOHN SHIELDS, PROFESSOR, DEPARTMENT OF POLITICS AND PUBLIC ADMINISTRATION, RYERSON
UNIVERSITY
TUESDAY, FEBRUARY 11TH, 2014
Social Impact Bonds: The Next Phase of Third Sector
Marketization?
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Presentation Overview
Why the Current Interest in SIBs?
SIBs as a Market-oriented Policy Tool Practical Design and Implementation
Challenges Fundamental Challenges
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Why the Current Interest in SIBs?
Government Third Sector Private Sector
Transform funding and delivery of social policy
Reduce social service costs
Alternative to universal and institutional care
Efficient public investment
Greater transparency and accountability
Political malleability
Immediate and long term payment
Minimal delivery prescriptions
Appeal to large nonprofits
Larger role for foundations
Altruism
Enhance Competitiveness
Service privatization
Access to government policy design and delivery decisions
Consulting firms will see new business opportunities
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SIBs as a Market-oriented Policy Tool4
Marketization SIBs part of agenda to reform the public sector to
operate more like a private business Alternative service delivery complimented by
alternative service funding SIBs could facilitate privatization of service delivery
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SIBs as a Market-oriented Policy Tool5
Social Innovation “Proven ideas that work to address unmet needs by
applying new learning and strategies to solve these problems” (HRSDC, 2013, 9)
Conceptualization heavily marketized Framed as alternative to big government SIBs used to transform nonprofits into efficient and
innovative market actors
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Practical Design and Implementation Challenges
Government Third Sector Private SectorNo reduction in bureaucracy and costs
Reduced control over service provision
Problems with evaluation
Cherry-picking further excludes the most vulnerable populations
Could reduce grant and donation funding
Do not have full control over results
Competitive disadvantage in service bids
Demands for evaluation and monitoring
New management and evaluation skills required
Risky for employees and service users
SIBs a risky investment
Risk aversion
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Fundamental Challenges 7
Model of philanthropy not intended to displace state run social policy
SIBs may represent privatization with the nonprofit sector used as legitimation
Social problems framed as an individual’s lack of self-responsibility
Social profit organizations may be less willing to operate where they cannot make money
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Fundamental Challenges 8
Need to expand, not reduce the vision of what the nonprofit sector does
SIBs can be both empowering and disempowering, freeing and controlling Need to assess who wins/loses with the broad
implementation of this policy toolSupport for the third sector should include stable
and long term funding that covers core administrative costs and community engagement and organizing Provides sustaining foundation for the third sector and
empowers nonprofits to be innovative
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Further Information and Follow-up
Joy, M. & Shields, J. (2013) Social Impact Bonds: The Next Phase of Third Sector Marketization? Canadian Journal of Nonprofit and Social Economy Research. 4(2): 39-55.http://anserj.ca/anser/index.php/cjnser/article/view/148
Meghan Joy: [email protected] Shields: [email protected]
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