Transcript Social Impact Venture Capital Trust
INTRODUCTION TO OUR SOCIAL IMPACT BOND WORK NOVEMBER 2012
Jane Newman, International Director
Emily Bolton, Director
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©Social Finance 2012
SOCIAL FINANCE IS PASSIONATE ABOUT IDENTIFYING NEW WAYS OF TACKLING ENTRENCHED SOCIAL ISSUES – IN SUSTAINABLE AND SCALABLE WAYS
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WHAT DO WE DO?
3 Develop deep understanding of key social issues Identify effective interventions; analyse where the costs of failure rest Develop new revenue models which reward effective social action Build investor confidence in the financial and social value of these models Work hard to make the models deliver in practice Build and share evidence of what works IN ORDER TO Change the way government seeks to tackle problems Help build and support growth of strong, effective social enterprises Expand the range of investors able to participate in social investment AND THEREBY DELIVER
SOCIAL CHANGE
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OUR ROLE IN THE MARKET
SOCIAL FINANCE DESIGNS FINANCIAL STRUCTURES THAT ENABLE MORE CAPITAL TO REACH THE SOCIAL SECTOR 4 Investors Government Supporting Effective Organisations ©Social Finance 2012
Social Finance
Research & Development Financial Structuring Capital Raising
Key social issues
Social Investor Market Growth Social Service Providers Long-term Social Change
THE STARTING POINT: CONSISTENT UNDER-INVESTMENT IN PREVENTION
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Higher level of spending on crisis interventions Poorer social outcomes, more require crisis interventions Fewer resources available for early interventions
CAN THE LONG TERM SAVINGS FROM AVERTING POOR OUTCOMES BE USED TO INVEST IN PREVENTATIVE SERVICES?
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SOCIAL IMPACT BONDS CAN UNLOCK THIS
SOCIAL IMPACT BONDS Money to invest in earlier interventions More early interventions Lower spending on crisis interventions Better outcomes; fewer individuals requiring crisis interventions
SOCIAL IMPACT BONDS CATALYSE POSITIVE CYCLES OF GOVERNMENT SPENDING, IMPROVING SOCIAL OUTCOMES AND REDUCING COSTS ©Social Finance 2012 6
FUNDING REHABILITATION AT PETERBOROUGH PRISON
St. Giles Trust Support in prison, at the prison gates and in the community 7
INVESTORS
£5 million Return depends on success
SOCIAL IMPACT PARTNERSHIP
Ormiston Trust Support to prisoners’ families while they are in prison and post release SOVA Providing volunteer support post intensive phase or with lower risk/need clients pre and post release Payment based on reduced convictions
MINISTRY OF JUSTICE/ BIG LOTTERY FUND
Reduction in re-offending Other Interventions Support needed by the prisoner, in prison and the community. Funded as the need is identified eg. Lower level mental health support
3,000 male prisoners sentenced to less than 12 months
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RECENT PROGRESS
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Young people in or on the edge of care
Announced 23 November 2012: Awarded contract by Essex County Council to deliver and finance multi-systemic-therapy to over 380 adolescents on edge of care system in Essex over next 8 years – outcomes financed by savings from reduction in care placements Advising Manchester City Council on options to raise social investment to fund multi-dimensional foster care working with vulnerable adolescents •
Improving education and employment prospects for young people
Announced 31 October 2012: Awarded two contracts by Department of Work and Pensions to work with specific groups of 14-16 year olds with outcome payments made at agreed milestones •
Prisoner rehabilitation
Advising two consortia on bids to participate in £20 million of outcomes payments pledged by the Ministry of Justice •
Homelessness
Announced 23 November 2012: Advising Greater London Authority on procuring interventions to address rough sleeping financed by £5 million outcomes budget A RECENT NCVO REPORT IDENTIFIED 28 ACTIVE PAYMENT BY RESULTS INITIATIVES ACROSS UK PUBLIC SECTOR ©Social Finance 2012 8
INTERNATIONAL CONTEXT
International interest has surged in the past two years Canada
• Manifesto commitment from new government • Exploring applications in criminal justice and worklessness
Scotland
• Manifesto commitment from new government • Spending review outlined plans for at least two areas
Germany
• • Bertelsmann Stiftung Social Venture Fund
US
• Separate sister organisation launched • Massachusetts started procuring two SIBs in youth justice and homelessness • Connecticut, New York State and Minnesota developing SIB projects • NYC and Goldman Sachs announced a Social Impact Bond in August 2012 for rehabilitation of offenders from Rikers Island ©Social Finance 2012
Ireland
• Manifesto commitment from new government • Presently exploring five areas
Israel
• Government interest • Plan emerging around employment for ultra orthodox communities • •
Australia
• New South Wales has announced three co-development partners for applications around reoffending and out of home care Federal government interest Emerging intermediaries/large NGOs 9
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SOCIAL IMPACT BONDS ARE NOT A UNIVERSAL SOLUTION – THERE ARE KEY INGREDIENTS
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WHAT IS REQUIRED FOR A SIB?
11 Robust outcome metric Clearly defined target group Cost of intervention is small relative to potential public sector value Evidence-based interventions Issue area a priority for public sector Measurable attribution Issue area a priority for investors ©Social Finance 2012
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BUILDING THE INVESTOR BASE
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ENGAGING WITH KEY POOLS OF INVESTOR CAPITAL
MEDIUM TERM FOCUS TRUSTS AND FOUNDATIONS £70bn assets in UK NEAR TERM FOCUS HIGH NET WORTH INDIVIDUALS MASS AFFLUENT ISAs £92bn INSTITUTIONS £488 bn Early signs of Local Authority Pension Funds interest.
13 CORPORATES Could philanthropy be an asset, not an expense in their balance sheets?
Fund Managers Family Offices Private Banks IFA Investor Advisory Services ©Social Finance 2012 STRUCTURED FUNDS Global Social Impact Fund of Funds Venture Capital Trust Enterprise Investment Scheme as a wrapper for SIBs BIG SOCIETY CAPITAL SEEDED FUNDS The Results Fund Impact Ventures UK Fund Nesta Impact Investment Fund Investors Intermediaries
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APPENDIX
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NEW PRODUCTS
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Global Social Impact Fund
$250m institutional quality fund of funds focusing on 15-20 private equity and debt funds across Africa, LatAm and SE Asia.
Five key sectors: financial inclusion, agriculture, healthcare, micro-cap SME and community based energy. Working with fund management team with over fifty years combined experience.
Targeted at family offices and private banks across the globe.
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Social Impact Venture Capital Trust
London listed regulated product supported by a strong independent board which IFAs comfortable to promote. Offers mass affluent investors a tax enhanced return on a portfolio of investments in social enterprises working with disadvantaged groups, improving community cohesion, providing better health and social care and ethical consumerism. Targeted for completion in 2012/13 tax year.
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©Social Finance 2012
THANK YOU!
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