ryan short from genesis analytics
DESCRIPTION
Ryan Short presents on social impact bondsTRANSCRIPT
An introduction to Social Impact Bonds
Making CSI Matter Conference 2014
Ryan Short
Genesis Analytics
3 June 2014
About Genesis
Genesis is a development economics consultancy. We work with governments, donors and private sector on
economic growth, poverty reduction, and solving developmental challenges.
• Have partnered with Social Finance (UK) to develop the SIB concept in South Africa
• Investigating use of SIBs in ECD, education, health, and business development services 1
Table of Contents
What is a SIB?
International experience
SIBs in the South African context
Discussion
‘Traditional’ social investment
3
INVESTORS
$
SERVICE
PROVIDERS
$
BENEFICIARIES
THE STATE
• No financial sustainability
• No link between social and
financial returns
• No secure, multi-year funding
• Limited flexibility
• Poor understanding of
outcomes
• Poor at innovating
• Monitoring and measurement often
focused on inputs and/or outputs,
rather than outcomes $
Focus on social returns. Limited sustainability.
The Social Impact Bond model
4
INVESTORS
$
SERVICE
PROVIDERS
$
BENEFICIARIES
OUTCOME
FUNDER
• Recycled capital
• Proportional outcomes-based
returns
• Stable multi-year funding
• Flexibility and innovation
• Opportunity to test, prove and
scale up intervention models
• Cost saving
• Low risk on innovation
$
• Independent
verification of
outcomes
• Proportional payment of
outcomes-based returns (up to a
cap)
Sustainable social and financial returns.
Privatisation of social services
Complex and expensive model
No evidence of success (yet)
Outcomes-focused
Recycling of capital
Win-win-win-win
The major benefits and criticisms of SIBs
5
BENEFITS
CRITICISMS
The jury is still out, but indications are positive.
International experience
6
• First SIB launched in 2010 in the UK by Social Finance.
• Now more than twenty SIBs (raising in total approximately US$100 million) have been launched around the
world.
• Significant funding has been set aside for SIBs by the UK and US government.
– £60 million of funding allocated by the UK Cabinet Office and Big Lottery Fund,
– proposed US$300 million allocation in the White House FY2014 budget.
• In June 2013 the G8 Forum established the G8 Task Force for Social Investment, with the aim of exploring the
potential of impact investment as a means to tackle significant social issues.
• No SIB yet launched in the developing world.
International experience
7
Key:
SIB Implementation
SIB Investigation
DIB Investigation
12
4
3
6
1
2
2
4
Homelessness,
unemployment,
youth outcomes,
teenage
pregnancy,
malaria, sleeping
sickness, HIV and
TB, education,
recidivism, family
support services,
workforce
development and
early childhood
development.
SIBs comprise a number of critical components
8
Private monetary
investment at risk
Programme of
actions to improve
prospects of target
group
Commitment by
government to
make results-based
payments
SIB
Robust outcome metric
that can be measured and
attributed to intervention
Willing
outcomes
funder, investor
and service
providers
Costs of intermediation
can be absorbed
Savings to the state that can be calculated
Cost of intervention is
small relative to potential public sector savings
Clearly defined social problem and identifiable
target group
Clear social
challenge to be
addressed
The potential for SIBs in South Africa
9
Private monetary
investment at risk
Programme of
actions to improve
prospects of target
group
Commitment by
government to
make results-based
payments
Robust outcome metric
that can be measured and
attributed to intervention
Willing
outcomes
funder, investor
and service
providers
Costs of intermediation
can be absorbed
Savings to the state that can be calculated
Cost of intervention is
small relative to potential public sector savings
Clearly defined social problem and identifiable
target group
Clear social
challenge to be
addressed
?
Discussion
10
• Points of clarification
• The South African context
– Challenges
– Opportunities
– Examples
