The importance of social impact measurement in a Social Impact Bond
The first national Social Impact Bond conference in the Netherlands, organized by START Foundation, is a fact. It was even the first national conference on Social Impact Bonds (SIBs) globally, since SIBs are still a relatively new phenomenal. Worldwide there are nearly 50 SIBs up and running of which 3 are launched in the Netherlands. Clearly, some people think this will become much bigger than it currently is.
What is all the fuss about?
SIBs are a new and innovate financing vehicle in which the private sector works with governments and philanthropies to fund social programs that help address social issues. In this “bond”, investors are only repaid if and when improved social outcomes are achieved.
Social impact bonds have the potential to open new funding sources to tackle a variety of social issues, saving taxpayer money in the process. The current SIBs focus on issues like adoption, family therapy and foster care, employment, housing & homelessness, reoffending, health, disability, addiction, education and youth. There are at the moment hundreds? of SIBs in development, sometimes renamed as Health Impact Bonds or Development Impact Bonds.
What will it take for SIBs to flourish?
At the conference it was more than clear that social impact measurement is key for all parties involved.
It is still not a common practice however, to articulate which outcomes governments want to achieve, let alone putting a value on these outcomes. The need was expressed for a database that collects information regarding outcomes and values. In the UK (where 30 SIBs have been launched) the Global Value Exchange already provides you with approx. 1,900 outcomes and over 3,500 valuations (of which most are only relevant in the UK context).
Services providers, for example social enterprises, also need to improve their impact measurement and management processes. It all starts with a “social business case” that can be presented to government and social investors. Based on this plan they can judge if the intervention could work in a SIB construction, the same way as a bank will judge a “regular” business plan. If a SIB is launched the social impact needs to be measured and managed continuously by the social entrepreneur to achieve the desired outcomes and ensure the repayment by the government.
How we can help?
Sinzer supports service providers, governments, foundations and social investors measuring social impact. Download an example of the Social Business Case we have developed to measure the social impact of ex-convict mums.
Topics: Social impact, Social enterprise, Impact investing, Maatschappelijke business case, philanthropy, overheid, publieke aanbesteding, aanbestedingen, government, Social Impact Bond