EU Webinar Series | #3PIN for the webinar. Dial using the information provided in the registration...

With the financial support of the European Union

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EU Webinar Series | #3

– Social Impact Bonds in the EU –

5 March 2015



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4

Welcome to EVPA’s Webinar!



SIB Webinar | e-Moderators

5

Jane Newman Social Finance

Elinor de Pret EVPA



EVPA & Public Affairs

6

by Elinor de Pret EVPA

EU W

ebin

ar

Seri

es

mailto:[email protected]



SIB Webinar| Welcome to our e-Speakers!

7

Teele Raun Good Deed Foundation

Emilie Goodall Impact+, Bridges Ventures

Camilla Backström Forum for Social Innovation Sweden

Antonio Miguel Instituto de

Empreendedorismo Social

Roger Bullen Evidence-Based Social

Investments Ltd



8

SIB Webinar | Panelists

Emilie Goodall

Director of Projects, Impact+, Bridges Ventures

Roger Bullen

Chief Executive, Evidence-Based Social Investments Ltd | Company Director, Roger Bullen Consultancy Ltd

Antonio Miguel

Coordinator, Social Investment Lab, Instituto de Empreendedorismo Social (IES) (Portugal)

Teele Raun

Social Impact Bond Project Manager, Good Deed Foundation (Estonia)

Camilla Backström

Senior Advisor, Impact Investing & Impact Measurement, Forum for Social Innovation Sweden

Jane Newman

International Director, Social Finance | Board Member, EVPA

Elinor de Pret

Public Affairs Manager, EVPA

e-Sp

eake

rs

e-M

od

erat

ors



9

SIB Webinar | Programme

1.1 Emilie Goodall

A Global Snapshot

1.2 Roger Bullen

The UK Commissioner Experience

1.3 Antonio Miguel

SIBs in Portugal

1.4 Teele Raun

SIBs in Estonia

1.5 Camilla Backström

The Nordic Perspective

2.1 Jane Newman

Conclusions

2.2 Q&A Session (moderated by Jane Newman and Elinor de Pret)

PAR

T I

PAR

T II



Before we start| The SIB Model

10

by Jane Newman Social Finance

Private Investors

Service Providers

Public Authorities

Intermediary

1°

2°

5°

4°

3°

Independent Evaluator

1. Investment 2. Working capital 3. Social outcomes; government savings 4. Performance-based payment 5. Principal and interest




1.1 | SIBs – A Global Snapshot

11

by Emilie Goodall Impact+, Bridges Ventures

Social Impact Bonds: A global snapshot

Emilie Goodall, Director of Projects Impact+, Bridges Ventures 5 March 2015

USA: 5

Australia: 2

UK: 29 Netherlands: 1 Belgium: 1

Canada: 1

Germany: 1

Current SIBs in operation

USA: c.20

Australia

UK: c.60

Uganda

South Africa

India

Pakistan

Canada

Colombia

Mozambique

Israel

Swaziland

Mexico

SIBs under development

Germany

Ireland Belgium

South Korea

Sweden

Portugal

Adoption

Housing & Homelessness

Health

Unemployment

Reoffending

Addiction

Policy Issue No. in development No. operational

6 2

9 3

0 13

10 10

1 2

0 2

Totals 60 29

Education 0 1

Youth 0 1

Disability 0 1

Family Therapy & Foster Care 3 25

SIBs in development in the UK, by issue

Three distinct SIB structures: Direct model

e.g. Sweet Dreams, Saskatchewan, Canada

Three distinct SIB structures: Intermediated model

e.g. New Horizons, UK

Three distinct SIB structures: Managed model

e.g. Adolescent Behavioural Learning Experience, New York City, US

What is the value of a social impact bond?

Enable outcomes payers to…

Enable service

providers to…

Enable investors

to….

Focus resources on outcomes

Invest in intervention and preventative services

Stimulate innovation

Have scope to innovate

Grow services

Catalyse entrepreneurial solutions

Link financial returns to social outcomes

Deliver better outcomes

Achieving these intended benefits may require behavioural shifts

Leading to longer-term system change

‘We say we’re here to make a difference but we don’t know

whether we are or not. Government doesn’t know whether we are or not. What’s changing in practice is a cultural shift within

teams. ’

‘Internally, it has given the team a sharp focus on delivering more

evidence-based provision […] We feel our more evidence-based

approach has helped in winning new contracts.’

http://www.bridgesventures.com/impact-plus/ [email protected] Bridges Ventures LLP

38 Seymour Street

London

W1H 7BP

Telephone +44 (0) 20 3780 8000

Email [email protected]

www.bridgesventures.com

Bridges Ventures LLP is authorised and regulated by the Financial Conduct Authority



1.2 | UK Commissioner Experience

22

by Roger Bullen Evidence-Based Social Investments Ltd

The Essex Social Impact Bond

A Local Authority based SIB funding interventions for young people at the edge of care:

The commissioner experience

The Essex SIB:

Intensive evidence-based interventions: 2 Multi Systemic Therapy (MST) Teams

Referral capacity: 380 families

SIB intermediary: Social Finance LTD

MST Provider: Action for Children

Performance target: 110 young people diverted from care or custody

Projected savings: £17.3m gross over the life of the scheme

Savings: £10.3 net

The rationale for a SIB: Need: high numbers of children in care, high cost, poor

longer term outcomes

Savings: budget deficits, history of failed internal investment

Risk: displacement of risk to investor

System: shift towards prevention, evidence-based and solution focussed, building family strengths and resilience, reducing future dependence and demand

Transformation: sustainable and outcomes driven, outcomes-led commissioning, council transformation

Counterfactual:

Methodology: historical case review 650 cases from an appropriate referral window, at least 30 months in the past

Eligibility filters: age, case type, MST exclusionary and eligibility criteria

Benchmark data: establishing performance pre-MST:

The number entering care

The number that didn’t enter care

The aggregate care days spent

Average length of stay in care

Outcome and Payment Metric:

Primary outcome / triggers payment:

Outcome:

The reduction in aggregate care days spent as compared to the counterfactual control review

Duration:

To the maximum of the average length of stay as observed and set by the counterfactual control review (30 months)

Challenges: Complex commissioning: Current co-development model reduces

competitive element, runs against procurement regulation, introduces difficulty with specification and lack of price transparency

Market barriers: Narrow market for Social Investment and Finance Intermediaries (SIFIs), intervention providers with capacity to work within a SIB structure, lack of choice and competition

Long development lead ins: Out of step with presenting needs and financial cycles

High development and transactional costs: Legal and technical, procurement and post contract governance

Commissioner capacity: Financial austerity, reduced capacity, staff turnover, changing organisational structures

Opportunities:

New EU Procurement Directives: Innovation Partnerships, flexibilities for social care and social enterprises

Financial support: Big Lottery Fund, Cabinet Office Support in UK

New models: Standardisation, supporting greater ability to specify, replicate and scale

Outcome pricing: Transparent and tuned to Local Government ‘value for money’ principles

Provider led: Investor / Provider partnerships



1.3 | SIBs in Portugal

30

by Antonio Miguel Social Investment Lab, IES

SOCIAL IMPACT BONDS IN PORTUGAL

Code Academy Jr – Improving educational outcomes for

primary school students

EVPA SIB Webinar, March 5th

[email protected]

0 €

25,000 €

50,000 €

75,000 €

100,000 €

125,000 €

Custo CML Pagamento resultados

32

CODE ACADEMY JR SIB – OVERVIEW

Invest

ment

Gra

nt

The social issue – school failure The intervention model – Code Academy Jr

Cost and Revenue Profile Financial Structure

Cost Max Outcomes payment Grant (costs) Investment (costs) Revenues

Problem solving

School performance

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CODE ACADEMY JR SIB – MAIN LESSONS

PILOT PROJECTS

(piloting is key to gain trust among

commissioners , investors and soc orgs –

markets need live examples to relate to)

ENGAGE WITH DIFFERENT

PERCEPTIONS

(crucial to map motivations and starting points

in order to align interests)

UNDERSTAND LOCAL

CONTEXT

(understand what is the use that local market

players see for Social Impact Bonds)

THE DEAL IS NOT OVER ONCE

THE SIB STARTS

(investors and commissioners are keen to

visualise the learning process throughout the

SIB period)

THANK YOU

Q&A

EVPA SIB Webinar, March 5th

[email protected]



1.4 | SIBs in Estonia

35

by Teele Raun Good Deed Foundation

Ole osa muutusest www.heategu.ee

EVPA Webinar Social Impact Bonds in the EU

05.03.2015

Piloting the SIB in Estonia Challenges and insights

http://www.heategu.ee/


PUBLIC

PRIVATE

NON-PROFIT

Independent

since 1991

tech start-ups 22nd out of 189 in the ease of doing business

EU member since 2004

e-country

growth until 2010

unstable funding

ESTONIAN CONTEXT



1. Committing state actors

2. Identifying potential investors

KEY CHALLENGES UNTIL NOW



CHALLENGE:

Committing state actors

- Government change and parliament elections

- Some government agencies overwhelmed with work (e.g. due to reforms)

- Tight schedules of the officials

OUR APPROACH

- Spokesman among government agencies e.g. Estonian Development

Fund

- Involving the state actors in mapping social problems

- Securing support on the high official level early on



CHALLENGE:

Identifying potential investors

- Young market and low volumes

- Low awareness of CSR and sustainability among companies

- Investor profile: looking for high IRR, interested in tech start-ups

OUR APPROACH

- Using references and one-to-one meetings

- Involving spokesmen in the sector e.g. one of the biggest commercial

banks in Estonia

- Approaching via different actors e.g. corporations, umbrella

organizations, private & corporate banking



THANK YOU!

Teele Raun

Social Impact Bond Project Manager

Heateo Sihtasutus / Good Deed Foundation

[email protected]

www.heategu.ee





1.5 | SIBs – The Nordic Perspective

42

by Camilla Backström Forum for Social Innovation Sweden

socialinnovation.se | facebook.com/socialinn | @MSISweden

EVPA 5 MARCH 2015 SIBs in the Nordic Context

Camilla Backström

Talking points

• A quick overview of the Nordic context

• SIBs in the different countries

• Drivers and barriers

• Where the discussion is at the moment

Nordic context

• Strong social contract

• Social democratic history

• Culture

• Silos

• Not yet a sense of urgency

• Profits from welfare services

• Public sector challenges

SIBs in the Nordics

Drivers and bariers

Needs and where the discussion is

focusing at the moment

Understand how SIBs fit into our legal framework

Common view on how to measure impact

Cross sector collaboration

Welfare services and private profit

Nordic Model?



2.1 | Conclusions

50

by Jane Newman Social Finance




2.2 | Q&A Session

51



Elinor de Pret

Public Affairs Manager

[email protected]

52

Dr. Lisa Hehenberger

Research and Policy Director

[email protected]

Don’t hesitate to contact EVPA’s Policy Team, should you have any follow-up question related to this webinar and / or to EVPA’s activities!

Thank You !




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