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?

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

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

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

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

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: meghan.joy@ryerson.caJohn Shields: jshields@ryerson.ca

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