For over seven years, Elyse Sainty has been ‘in the trenches’ leading SVA’s social impact bond (SIB) and outcomes-based contracting work. She has helped service providers develop more than a dozen proposals, been at the table during eight contract negotiations, managed five active SIBs, worked with eight different line agencies across four state governments, and secured SIB capital from 160 investors.
In this two-part article she shares her reflections and insights. Elyse emphasises that the SIB work has all been worthwhile, however she has a few caveats.
In part 1, she challenges a few myths about SIBs.
In summary, SIBs do not bring additional money to the social sector, but are an important financing and risk-sharing mechanism for social purpose organisations entering into outcomes-based contracts with government.
The complexity of SIBs lies in developing the outcomes contract, not the financing arrangement.
SIBs are worthwhile for reasons over and above quantifiable budgetary benefits: they generate broader community benefits; improve the way services are procured and delivered; and enable governments to test new intervention models in a low-risk way.