Social Impact Bonds (SIBs) have evolved enormously since the first one was rolled out with HMP Peterborough in 2010. Today, they provoke mixed reactions, and strong criticisms from some quarters. But overall, charities and social enterprises providing services unders SIBs believe that they deliver strong outcomes for beneficiaries.
Charities are well placed to exploit specialist knowledge in some areas of service delivery. And, while facing a number of hurdles, this paper argues that charities should seriously consider working alone or in coalition to develop their own SIB proposals, and direct government policy towards delivering more effective interventions on behalf of beneficiaries. Charities are also in a unique position to influence the way SIBs are developed and used in the future.
As the government re-assesses its approach to social investment, we have identified a number of lessons drawn from SIB providers. These include:
- There is no blueprint or ‘one-size-fits-all’. Different legal structures and payment systems, for example, will suit different delivery models;
- SIBs can be daunting to charity staff and trustees—which can be overcome given adequate resources and preparation;
- SIBs demand a lot from charities, with new delivery systems to develop and myriad stakeholders to manage; and
- Charities currently delivering SIBs are finding ways to measure the outcome and impact of their work.
Author Abigail Rotheroe said:
We realise that this won’t be easy—but charities have built-in advantages for leading work on SIBs. It isn’t for the faint-hearted, but there is a big prize for charities, government and society as a whole if they get it right.
SIBs suit some charities, rather than all of them. It’ll need to be organisations who have the capacity and boldness to look at something new, and they’ll need to be confident in their ability to measure robustly the impact they have on people’s lives.
Download Best to invest? our guide for funders to think through the benefits and risks of social investment.