Australia’s first social benefit bond will deliver a first-year return of 7.5% to investors after meeting social outcome targets, a report by Deloitte has shown.
The Newpin bond, a $7 million pilot program run by UnitingCare to test the use of SBBs in Australia, aims to restore children to their families from out-of-home care, or prevent them from entering care in the first place, through creating safe family environments. It does this by funding an intensive 12- to 18-month course for parents, with strong outcome targets and performance measures guiding returns to investors in the program.
At the end of June the program had 55 families, including 82 children, in its three centres. During the first year, 28 children were successfully returned to their families, and 10 families at risk were assisted to prevent their children from being put into care.
SBBs are an innovative form of public-private partnership in which private investors provide up-front funding to service providers to deliver improved social outcomes. If these outcomes are delivered, there are cost savings to government that can be used to pay back the up-front funding as well as provide a return on that investment.
Claerwen Little, director of UnitingCare Children, Young People and Families, praises the SBB model for helping improve social outcomes. “The introduction of the Newpin SBB has supported practice innovation,” she said.
“A focus on outcomes has improved the quality of our work. We now work with a much higher share of families who have at least one child in care but we support them to systematically work through their own trauma and rebuild the bonds between parents and children.
“The Newpin approach supports parents to make significant changes in their lifestyles and to build the skills to create caring relationships.”
Little says it was a “tremendous bonus” that the SBB model allowed the program to be expanded as social targets were met.
“The Newpin ‘Restoration’ model, which has developed as a result of the Social Benefit Bond, means that an increasing number of New South Wales children will be able to grow up with their birth families, within a safe and nurturing home,” she said.
“The Newpin SBB has brought government, the investment community and a service provider together in a powerful and innovative way. I hope all partners share the joy we feel when Newpin members are ready to take their children home and are moved by the way highly vulnerable parents support and learn from one another.”
Ian Learmonth, executive director at Social Ventures Australia, which raised funds for the bond, calls the results “exciting”.
“It’s encouraging to see the bond delivering an attractive return in its first year, and to hear the positive personal stories coming out of the program. Tying funding to specific and measurable outcome targets has seen a new rigour embedded in the way this program is run and its ability to demonstrate the impact it’s having in the community. This is an exciting forward step for all of us concerned with large scale, meaningful social change,” he said.
“The clear outcomes achieved and 7.5% return to investors in year one means that the program can now expand and provide essential support to vulnerable families.”
NSW Treasurer Andrew Constance — whose government is increasingly moving towards delivering social programs in partnership with non-government organisations and recently announced it was seeking further ideas for outsourcing — said that outcomes so far were “certainly encouraging”:
“Not only are we tapping into a new source of funding by partnering with investors, we are delivering better social outcomes while providing cost savings to government.
“We look forward to the continuing success of the social benefit bond trial with UnitingCare Burnside over the next six years, and we’ll continue to look at more opportunities in this space.”
More at The Mandarin: Partnerships for public good: social benefit bonds in NSW