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The New South Wales government in Australia has made some progress with its social impact bond program. NSW started looking at SIBs about a year ago. Here are some details on their work so far.

Elizabeth Littlefield of OPIC (and previously head of CGAP at the World Bank) recently chaired a Steering Committee discussion on the application of social impact bonds in international development. Key questions, of course, are 1) who plays the role of the payer in this model, 2) how are social impact bonds different from Cash on Delivery, and 3) what’s the right intervention for this model? One intervention that has already been analyzed is for malaria (see Dalberg report). And the Gates Foundation, whose key achievement (and starting point for the foundation) has been with respect to polio, is interested not only in that, but also in family planning.

Here are some recent and earlier videos about social impact bonds.

1. An old announcement of the launch of the Peterborough social impact bond. Link.

2. A Centre for Social Impact video featuring Dr Alex Nicholls from the Skoll Centre for Social Entrepreneurship at Oxford and Professor Cheryl Kernot from the Centre for Social Impact. Link.

3. A short video by McKinsey describing the SIB concept. Link.

4. A webinar by McKinsey on SIBs. Participants include Tracy Palanjian from Social Finance, Professor Jeffrey Liebman from Harvard Kennedy School, and Laura Callanan from McKinsey, and moderator Matt Miller from the Washington Post. Link.

Social impact bonds seem to have caught the attention of the European Union. According to this website, the EU’s Employment, Social Affairs and Inclusion division is soon holding a seminar to explore funding strategies for addressing homelessness. The second seminar theme, titled Diversification of Funding Resources, includes “the potential of social impact bonds.”

In a May 18 memo titled “Use of Evidence and Evaluation in the 2012 Budget,” the Office of Management and Budget describes pay-for-success contracts. One key message of the memo: “Agencies should demonstrate the use of  evidence throughout their Fiscal Year (FY) 2014 budget submissions.” The memo covers:

– Proposing new evaluations
– Using comparative cost-effectiveness data to allocate resources
– Infusing evidence into grantmaking (the pay-for-success model is mentioned here)
– Using evidence to inform enforcement
– Strengthening agency evaluation capacity

The pay-for-success message is: “OMB invites agencies to apply a pay-for­-success model for programs funded by either discretionary or mandatory appropriations. Agencies should also consider using the new authority under the America COMPETES legislation to support incentive prizes of up to $50 million.”

Excepted language on pay-for-success:

     Pay for Success:  Taking the principle of  acting on evidence one step further, the
Departments ofJustice and Labor will be inviting grant applicants to use a “pay for
success” approach, under which philanthropic or private entities (the “investors”) pay
providers upfront and are only repaid by the government i f  certain outcomes are met.
Payment amounts are based, in part, on the amount that the Federal, State, or local
government saves.  A pay-for-success approach is appropriate where: (i) improved
prevention or other up-front services can produce better outcomes that lead to cost
savings at the Federal, State, or local level; and (ii) foundations or others are willing to
invest.
     To date, the Administration has focused its Pay for Success planning on programs
financed with discretionary appropriations.  OMB invites agencies to apply a pay-for­
success model for programs funded by either discretionary or mandatory appropriations.
Agencies should also consider using the new authority under the America COMPETES
legislation to support incentive prizes ofup to $50 million.  Like Pay for Success, well­
designed prizes and challenges can yield a very high return on the taxpayer dollar.

Source: http://www.whitehouse.gov/sites/default/files/omb/memoranda/2012/m-12-14.pdf

I was excited to see Christine Lagarde interviewed by the recently created Tri Sector Forum. TSF aims to identify and empower individuals who have the potential to become leaders in private, social, and public sectors. Ms. Lagarde will also be the MPP Class Day speaker at Harvard Kennedy School’s commencement address this year.

The interview: http://tri-sector.com/blog/item/lagarde.html

Patrick Lester at Driving Social Impact writes about some promising news for social services funding at the state level:

     According to a report released May 2 by the National Conference of State Legislatures, more than half of U.S. states expect to end their current fiscal years with budget surpluses. The report is based on a survey of state budget officials.
     The recovery is being led by an overall rebound in tax revenues. According to a separate report last month from the Nelson A. Rockefeller Institute of Government, state tax receipts have risen to their highest levels since the start of the recession in 2007. The gains have been highest in Midwestern states such as Iowa, Nebraska, Illinois, and Michigan.

I’m happy to report that the Harvard Kennedy School Review, which I help run, just released its 2012 issue. Some of the great articles include:

• It’s Not Just the Arab Spring, It’s the Economy (Stupid), By Josh Martin
• Lessons from the “Unorganizable”, By Laine Middaugh
• Counting What Counts, By Ben Beachy and Justin Zorn
• Behind Bars, Forever, By Casey Schutte
• A Needle in a Haystack, By Greg Larson

Very excited to be profiled on the Harvard Kennedy School website:

http://www.hks.harvard.edu/news-events/news/students/accenture-award

“We founded Instiglio with the mission of empowering societies to discover, adopt and scale innovative solutions to social problems,” said Belinsky. “Our team united over an opportunity to improve drastically the delivery of social services in developing countries by adapting the social impact bond model to emerging markets. We are thrilled to combine our Kennedy school training and our development world experience (our team has collectively worked in over 20 countries) to durably improve social service delivery. ” 

This brings back such good memories. I still remember the hectic days of creating this organization from scratch with my best friends during our sophomore year of college. DartMUN was the largest student-run conference the year we started it. And now it looks like it either is, or will soon become, the largest conference at Dartmouth. I’m so proud of all the people who have helped carry on the DartMUN tradition over the past six years.

High schoolers come to College for Model UN
Emily Brigstocke, The Dartmouth Staff
Monday, April 2, 2012
http://thedartmouth.com/2012/04/02/news/modelun

“Dartmouth Model United Nations hosted its seventh annual conference this weekend, drawing 500 students from 33 high schools across the country for the largest conference in DartMUN’s history.”

“Despite the serious aspects of the conference, the DartMUN staff also planned twists, such as the kidnapping of the prime minister of India from the Pakistani War Cabinet before the vote on a United Nations-sponsored cease-fire.”