On 10 December, the UK government announced £23 million of funding to not-for-profit organizations to combat homelessness, part of which will fund up to seven new social impact bonds.
The new Fair Chance Fund is a £15 million fund which will pay for sustained housing, employment and educational support for homeless 18 to 24 year olds, with investors putting in money now on a ‘long-term payment by results basis’. Seven projects have been awarded a share of the Fair Chance Fund money over three years from January 2015. Those projects are expected to be run as social impact bonds. If this is the case, this will increase the number of SIBs in the UK from 17 to 24.
An SIB is a type of payment-by-results contract in which a charity agrees with a commissioner to deliver an outcome. The charity receives social investment which it uses to pay for the service. If the outcome is achieved the investor makes a profit. If the outcome is not achieved the commissioner makes no payment and the investor loses out.
Click here to read the full article by Alice Sharman for Civil Society Media.
Click here for a sceptical note from Rick Cohen of Nonprofit Quarterly.