Social Benefit Bonds (SBBs): Supporting innovative programs to reduce the number of children and young people in care Sally Cowling UnitingCare Children, Young People and Families

Presentation outline Piloting SBBs to support innovation in NSW family restoration and preservation programs Burnside’s SBB journey Measuring outcomes and social benefits Preserving program integrity Challenges and opportunities

What is a Social Benefit Bond (SBB)? New financial instrument: private investors fund NGOs to achieve agreed social outcomes Savings from outcomes → government repays investment and pays a rate of return New source of outcomes-based funding to expand quality services and reorient spending UK and NSW governments leading the world

The NSW SBB Pilot Feasibility study by Centre for Social Impact RFP → 3 proponents selected (2 in OOHC) 6 month ‘development phase’ to: o Finalise service design and outcomes and translate these into a financial model o Develop performance contract and bond structure o Test market appetite for SBBs Genuinely collaborative negotiations

A Newpin SBB Burnside’s SBB proposal would fund the continuation and expansion of Newpin Evidence-based family restoration and secondary prevention model Breaking intergenerational cycles of abuse and neglect through longer duration, therapeutic work Mixed sample dynamics + therapeutic group work = points of difference with crisis interventions

What did we need to think through Burnside’s instinctive response: very positive Committed to an outcomes focus and frustrated by lack of options to ‘scale up’ effective innovations Key questions: o Would an SBB create perverse practice incentives? o Were there any threats to program integrity? Tested viability of a Newpin SBB with our historical outcomes and mix of families:

What did we need to think through The more important ‘thought experiment’ was whether a SBB created options to improve the quality of our practice in a way that: o Retained integrity of the Newpin model o Increased work with families who had children in – or at risk of entering – OOHC o Maintained viability of the SBB Excited about process which marries accountability to outcomes with practice freedom

How did we develop our proposal? RFP: difficult, demanding but invaluable process Three year case file review Examined who we worked with: characteristics, risk profile, outcomes achieved and not achieved Estimating direct and indirect savings to government was difficult Limited public data and cost-benefit analysis of social programs

What did we learn from the process? Value of ‘data immersion’ → defining target groups, outcomes, successes and failures Clearer understanding of: o Newpin member profile o Growth of restoration work o Patterns of disengagement

What did we learn from the process? Enabled good practice responses: o New strategies to address disengagement o Greater investment in staff training Improved internal reporting with an outcomes focus Better communication with referral networks

The development phase SBBs are a pilot and still under negotiation Collaboration between government and proponents to: o Define target groups and outcomes o Measure direct and indirect savings o Determine bond structure and rates of return o Agree on metrics to assess results We can then test the market appetite for SBBs

Will SBBs replace core funding? SBBs can bring new private funding to expand investment in effective social programs Only viable for programs where outcomes deliver significant short and long term savings Pilot will explore the scope for outcomes-based contracting As a sector are we ‘talking’ or ‘walking’ a commitment to outcomes?

Will SBBs lead to ‘cherry picking’? Savings only generated if Newpin achieves better family restoration and preservation outcomes relative to the ‘business as usual’ scenario Newpin results will be compared to a population with a similar risk and OOHC profile Results metric must displace incentive to choose ‘easy’ cases Organisational values demand we work with those most in need

Can smaller providers use SBBs? Innovative practice is not the exclusive province of large providers A key challenge for the SBB Pilot is to make sure the model can be replicated How can we provide data and templates to support the design of SBB proposals? How can we provide innovation seed funding to ‘road test’ effectiveness and assess risks and returns for investors?

SBBs: challenges and opportunities Additional investment in effective programs to reduce the number of children and young people in care is desperately needed SBB Pilot will need to be carefully designed and evaluated to test whether: o SBBs can attract private investment in innovative programs which deliver improved outcomes for vulnerable children and families o Investment in effective early intervention can reduce future need for expensive crisis services

SBBs: challenges and opportunities Definition and measurement of outcomes is easier said than done: most things that matter are SBB Pilot will support informed thinking about the role of social finance and outcomes-based contracting in social service provision The SBB journey has benefited Newpin practice Decisions about whether a child should be restored or removed must always be independent of funding decisions and mechanisms

Questions or comments? Thanks for listening! Contact details: Sally Cowling Manager, Research and Program Development T: (02) E: