Social Benefit Bonds The Benevolent Society’s Experience 29 October 2015

Presenter Wendy Haigh Executive Director, Social Investment The Benevolent Society

200 years of social innovation 1901 One of Australia’s first maternity hospitals 1999 Established Social Leadership Australia 2002 Co-founded Social Ventures Australia 2010 Jointly founded Goodstart and acquired ABC Learning Centre 2009 Introduced the Apartments for Life concept to Australia Australia’s first charity founded 1813 Led campaign for the world’s first old age pension Social Benefit Bond launched

The need for change Welfare is the fastest growing sector of government spending The Federal welfare budget now exceeds $146b a year But with our ageing population we have fewer and fewer taxpayers And we still have enormous unmet social need

Business ‘Doing good’ and ‘doing well’ Governments Direct expenditure to services that work For-purpose organisations Access to capital to scale impact BETTER COMMUNITY OUTCOMES An idea whose time has come

A Social Benefit Bond seeks to address a social problem that is very expensive for government with a program that has measurable outcomes to demonstrate success generates savings to government, from which investors receive a financial return that is funded by upfront private investments

Adverse Childhood Experiences ABUSENEGLECTHOUSEHOLD DYSFUNCTION Physical Emotional Sexual Physical Emotional Mental Illness Mother treated violently Divorce Incarcerated Relative Substance Abuse

Related health outcomes BEHAVIOUR PHYSICAL & MENTAL HEALTH Lack of physical activity Smoking Alcoholism Drug use Missed work Severe obesity Diabetes Depression Suicide attempts STDs Heart disease Cancer Stroke COPD Broken bones Lung cancer x3 ACE score≥7 Depression x4.5 ACE score≥4 Suicidality x12 ACE score≥4

143,000+ children receive child protection services nationally 73, 500+ NSW children (1 in 3) ‘known to child protection’ 51,500+ children in foster care nationally (up from 15,000 in 1998) 18,950+ children in foster care in NSW Yet … 97% of families who need intensive family support don’t get it The need for change in child protection

Foster care is expensive Government spends $3.3bn per annum on child protection and foster care Each child in foster care costs the government on average $60,000 a year The cost ranges from $38,000 for ‘standard’ service to $90,000 for intensive, home-based foster care Some high-need foster children are costing up to $288,000 a year And a handful of children costing us $1.2 million a year Our program spends approximately $25,000 per family (not per annum)

Our Social Benefit Bond $10 million raised In partnership with CBA, Westpac & NSW Government Funds a new program called ‘Resilient Families’ Working with up to 400 ‘at-risk’ families over 5 years An intensive wraparound service that works to improve children’s safety Goal: to prevent children being removed into foster care Measured against control group

Structure Overview

What are the returns? Reduction in child protection activity Annual compounded return to Class 1 (capital protected) Annual compounded return to Class 2 (capital exposed) Below 5%Capital onlyNil 5% - <15%Capital + 5%Capital + 8% ≥15% - <20%Capital + 6%Capital % ≥20% - <25%Capital + 7%Capital + 15% ≥25% - <35%Capital + 8%Capital + 20% ≥35% - <40%Capital + 9%Capital + 25% ≥40%Capital + 10%Capital + 30%

Monitoring & Measuring Performance Resilient Families Database Benevolent External Evaluation ARTD SBB Outcome Measures FACS Internal Evaluation Benevolent Independent Certifier Deloitte

Bond Outcome Measures % x SARA 17% x Helpline 66% x OOHC Improvement Percentage Performance Percentage Theoretical investor returns: 5% for Class P and 8% for Class E

Our Outcomes & Indicators

50 % 80 % of the care givers would manage on their current savings in an emergency. 75 % 87 % of the primary carers would know where to go if they needed help to find a job, food or housing 54 % 71 % of the care givers only experience low levels of distress. 66 % 86 % of the children were in normal range for overall social and emotional difficulties Internal Evaluation Indicators

Personal Wellbeing Measures Before (at entry) After (at exit)

Peter’s story Single father with 3 kids aged 4, 8 and 12

Peter’s life turned around

Thinking about a SIB? Does the subject area have appeal? Based on best practice with positive evaluation results? Will Government savings exceed cost of service? Is measurement feasible and is reliable data available?

Design & Implementation Challenges Sharing data across organisations Understanding Government data Implementing a trial in large organisations Managing expectations – patient capital Communicating complex information Preventing quick savings from driving service decisions

Our social investment strategy

Q&A

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