Social Benefits Bonds
What are Social Benefit Bonds?
A social benefit bond (SBB) is a financial instrument that pays a return based on the achievement of agreed social outcomes.
Under a SBB, investors fund the delivery of services targeting an improvement in a particular social outcome. Achievement of this outcome should reduce the need for, and therefore government spending on, acute services. Part of the resulting public sector savings are used to repay investors’ principal and also make additional reward payments. The level of the return on investment is dependent on the degree of outcome improvement achieved.
Social Benefit Bonds in NSW
In 2013, the NSW Government implemented 2 Social Benefit Bonds, the first in partnership with Uniting and the second with The Benevolent Society. These bonds are the first of their kind in Australia.
Both bonds have raised private capital to fund intensive services to either support children in care so they can be restored safely to their families, or to prevent those at risk from entering care.
Why use Social Benefit Bonds?
Social Benefit Bonds are an exciting way of building innovative partnerships with both the non-government sector and investors to deliver measurable, outcomes-based services. The bonds provide funding for important early intervention and prevention services that otherwise might not receive funding due to limited government resources.
Newpin Social Benefit Bond
The Newpin Social Benefit Bond provides funding to Uniting to deliver its Newpin program that supports children in out-of-home care so they can be restored to their families and also helps prevent at-risk children from entering care. Newpin is a long-term, centre-based, intensive support program that works with families to improve parenting so children can live safely at home. Parents and their pre-school children attend a centre between 2 to 4 times a week for approximately 18 months. The program includes a combination of therapy, parenting courses and parent/child relationship building.
The $7 million bond, which began operating in July 2013, runs for 7 years. The bond is funding 4 existing Newpin centres in Western Sydney as well as the expansion of the program to additional locations around NSW.
Newpin has a solid evidence base and track record of delivering successful family restorations. The restoration rate of children who enter the program is the key performance indicator determining the interest rate and the repayment obligations of the bond. All family restorations are independently decided by the NSW Children’s Court. Neither Uniting nor investors make these decisions.
To participate in the program, families must have at least 1 child younger than 6-years-old who has been in statutory care for at least 3 months, or who is at risk of entering care. Families can be referred by OOHC agencies, other government agencies, community organisations or they can self-refer but the referral must be approved by Family and Community Services (FACS).
For referral enquiries contact:
Social Benefit Bond Contract Manager, FACS
The Benevolent Society Social Benefit Bond
The Benevolent Society Social Benefit Bond was jointly developed by the government in partnership with The Benevolent Society, the Commonwealth Bank of Australia and Westpac Institutional Bank.
The bond is funding The Benevolent Society’s Resilient Families service, which is an intensive, therapeutic program that helps families deal with issues such as domestic violence and substance misuse, mental health, and unstable housing and aims to improve family functioning and relationships. The Benevolent Society has a successful track record in working with vulnerable children in NSW.
The $10 million bond began operating in October 2013. Over the 5-year term of the bond, The Benevolent Society expects to deliver Resilient Families to up to 400 at-risk families in Sydney’s south west, inner west and inner city.
Resilient Families works with families for up to 12 months to keep their children safe, with an initial 12-week intensive period where caseworkers focus on building trusting relationships and addressing immediate crises in the family.
The purpose of the service is to keep children out of the child protection system and keep families safely together.
Longer term, Resilient Families works with families to ensure that changes last. Caseworkers help families to make sure they are able to cope with future challenges and use other services to help them address their problems.
The rate of helpline reports, child protection assessments and entries into care for children who enter the program are the key performance indicators determining the interest rate and repayment obligations of the bond. The bond targets a financial return of between 6% and 30% at the end of the 5-year bond term, depending on the performance of the service and the investment tier.
To participate in this program, families must have at least 1 child under 6-years-old and must have been recently reported to FACS. The department will have investigated and confirmed that the child is at risk of significant harm, but can remain safely with his or her family if identified problems are addressed.
Families eligible for Resilient Families are identified and referred by FACS.