social impact bonds

flex — Tue, 20 Nov 2012 16:34:32 -0800

Are Social Impact Bonds a good way to invest in public services? "Imagine a contract where private investors are paid by the government if there's a decrease in homelessness or convicts re-offending. It's a an idea that's taking shape in the UK and some US states. And now the Canadian government is considering piloting social impact bonds. Critics say it's a way of governments shirking their responsibilities." CBC's "The Current" reports. Summary at the main link; show is audio (listen at the main link), 24 min. long. Also covered on AlJazeera's The Stream program - lots of videos & infographics at the link; direct link to video is Betting on public good? (<--- story begins at this time-adjusted link, lasts about 20 min.; postshow lasts 6 min.) *Toronto Star - Feds introduce controversial ‘social impact bonds’ to fund social services

The federal government is introducing a controversial new approach to funding social services called “social impact bonds” that can turn a profit for private investors. Prime Minister Stephen Harper’s Conservatives, who have often been accused of short-changing social programs, view the bonds as a valuable source of fresh funding for Canadian communities. ...Under Finley’s proposal, the government would contract with a non-profit organization or a private, for-profit business to supply a service, such as building affordable housing, counselling ex-convicts to keep them from reoffending, or working with at-risk youth. Funds would be raised from investors or charities to finance the project and, if the goals of the project were reached, the investors would be repaid their original investment plus a profitable return by Ottawa. If the project’s goals weren’t met, the federal government wouldn’t pay. The bonds, which have caught on in a big way in Britain and the United States, are a source of widespread debate. Many praise the idea as an innovative strategy to tap private capital and market discipline to address underfunded social goals. But critics say the bonds privatize social objectives in a way that gets governments and the public off the hook for paying for needed programs. “It’s a commercialization of social values,” said David Macdonald, a senior economist at the Ottawa-based Canadian Centre for Policy Alternatives. One of the foremost questions about this funding model concerns how the outcomes are measured to decide whether it’s a success that leads to a payout for investors. Macdonald said private-sector investors will learn how to arrange the project and the eventual performance assessment in a way that ensures they don’t end up holding the bag. “What will probably end up happening is that the government will pay dramatically more for programs that 10 years ago would have been funded because they were good ideas,” he remarked. “Now they’ll run them through this bond system, whereby some private financier makes 10 per or 20 per cent on their investment rather than the government evaluating a good idea and saying, ‘Yeah, that’s a good idea, let’s fund that.’ Critics have also questioned whether the bond program will lead to reduced funding for non-profit organizations supplying valuable but hard-to-measure services.

*NYT - Giving Back More Than A Warm Feeling: Investors profit by giving through social impact bonds

The seven teenagers sit with their feet tucked under tan desks in a classroom in New York City’s Rikers Island jail... The adolescents are part of a new program aimed at building personal responsibility and life skills, with the goal that fewer of them will re-offend. The program is financed by an innovative mechanism called a social impact bond, one of a handful of ways that philanthropy is trying to tap new pools of funding to produce measurable social results. If the program succeeds in significantly reducing recidivism, the “investors” paying its upfront costs — in this case, Goldman Sachs, with backing from Bloomberg Philanthropies — will be repaid by the city with a modest return. If the program falls short, the investors lose their money, sparing taxpayers the costs of the program. The “social impact bond,” also known as a “pay for success” bond, is the latest — and most discussed — tool in a broader playbook philanthropists are using to blend business and charity to make a bigger difference. Sometimes known as impact investing, these approaches include providing low-interest loans to nonprofits, making equity investments in companies that tackle social problems and investing a portion of a foundation’s endowment in enterprises that produce measurable benefits to society and a financial return...

*wikipedia - social impact bond *SocialFinance.ca - social impact bonds *Gov't of Canada Economic Action Plan - The Government of Canada is Taking Action to Address Local Challenges *Knowledge@Wharton - Social Impact Bonds: Can a Market Prescription Cure Social Ills? *NYT Opinionator - The Promise of Social Impact Bonds *The Economist - Playing with Fire and Being Good Pays *SSIReview: Social Impact Bonds: Lessons from the field *Stanford Social Innovation Review - The Trouble With Impact Investing, Part 1: "There's only one bottom line. It ought to be impact." (Part 2 & Part 3) *RCI (Radio Canada International) - Ottawa’s new social policy will mostly benefit private sector, says economist

Giving What We Can

philipy — Mon, 13 Dec 2010 16:40:02 -0800

Giving What We Can is a movement founded by Toby Ord , a 31 year old Oxford academic on slightly more than average income who plans to give away a million pounds during his lifetime. “I realised that by donating a large part of my future income to the most efficient charities, I really could save thousands of people’s lives. Since I already have most of the things I really value in life, I thought — why not?” -- Toby Ord The Giving What You Can membership consists of people, including philosophers, development economists, web developers and teachers, who have pledged to give at least 10% of their income to the most effective charities they can find. The website has interesting things to say about what they term eight persistent myths about aid, which are commonly put forward as objections. It also has interactive tools to figure out how rich you really are compared to other people in the world, and what kind of impact you personally could have.

Questioning Kiva

kmennie — Mon, 16 Nov 2009 04:43:58 -0800

Kiva transparency commentary: "I suspect that most Kiva users do not realize this." The controversy is summarized by the NY Times. See also: MetaFilter Kiva team, and a microfinance gateway. Links harvested from the estimable CSRL newsletter.

The global distribution of income is becoming ever more unequal.

schoolie — Mon, 18 Jun 2001 03:43:58 -0800

The global distribution of income is becoming ever more unequal. One of the proposed solutions? More charity by the ultra-rich.

MetaFilter posts tagged with philanthropy and economics

social impact bonds

Giving What We Can

Questioning Kiva

The global distribution of income is becoming ever more unequal.