To date 66 children have been restored to their families and another 35 families have avoided their children having to enter foster care – achieving double the result of similar programs.
In 2013, the NSW Government received $7 million from non-government sector investors to protect children in the state who were ‘at risk’. The NSW government is paying those investors an 8.9 per cent return on the investment. It is Australia’s first example of a new wave called social impact investing – and it is working right across the world.
In simple terms, governments say if private investors will help to fund programs that improve social outcomes and reduce government expenditure then the government will pay investors a percentage of the money the government has saved. [click here to read more about Social Benefit Bonds and how they work.]
The NSW example includes a project called Newpin, managed by UnitingCare Burnside. It targets parents of children under the age of five who are at risk. The objective is to break the cycle of intergenerational neglect and abuse; the parents are required to undertake an intensive parenting educational program.
To date 66 children have been restored to their families and another 35 families have avoided their children having to enter foster care – achieving double the result of similar programs.
The government expects to save $80 million from this initiative, easily affording the 8.9 per cent return on the $7 million originally invested by private individuals.
Social impact investing is a win, win, win, win, win scenario – for the government, for taxpayers, for the service providers, for investors and for the clients. And us as a society.
Other countries trialling the system
The NSW government is now looking at youth homelessness, supporting offenders on parole to reduce their levels of re-offending; and managing chronic health conditions including obesity. Other countries trialling social impact bonds include Britain, Ireland, Israel, Canada and Brazil. President Barrack Obama has committed $100 million for trials.
The fascinating dynamic is the way the commercial driver of a ‘return on investment’ is opening the way for strategies and methods which have long been known to work – such as UnitingCare’s Newpin program – but were difficult for government funds to cover. This is despite the now demonstrated ability of such projects to reduce the government’s overall costs in the longer term.
Social impact investing is a win, win, win, win, win scenario – for the government, for taxpayers, for the service providers, for investors and for the clients. And us as a society.
