Triodos bank uses social impact bonds to improve employment in the UK

A while back, UK's Department for Work and Pensions (DWP) created a 30 million GBP innovation fund competition to encourage "social service delivery organisations, financial intermediaries and private sector investors to work together to design and finance programmes which can help improve employment outcomes for the most vulnerable young people in society."

Today, VNFW reports details of one of the winners of DWP's competition: Triodos Bank.  Triodos will partner with a service provider, Greater Merseyside Connexions Partnership (GMCP), on a program, that will start in 2012 and run for 3 years, to help 3900 youth ages 14-24 in Merseyrside get jobs.  

The maximum payout of the social impact contract appears to be 4.5 million GBP ($7 million USD).  Triodos raised 2 million GBP to fund upfront operating costs from "a syndicate of leading UK social investors, including the Big Society Investment Fund."  The key question is whether the syndicate included for-profit investors. If it did, this would make this social impact bond the first to attract private capital. (The Peterborough prison SIB was funded by philanthropic institutions exclusively.)

Two other interesting features of this contract are that a) Social Finance, the originator of social impact bonds, does not appear to be involved and, b) the contract is not for recidivism.  These are both firsts for SIBs.  The first point means that if this works, it proves that yet another firm can act as a SIB intermediary.  The second point expands the proof of concept to an additional social problem.  Social problems addressed by SIBs, so far, are:

Peterborough, UK - adult recidivism (service delivery in progress)

Mass., US - youth recidivism (RFR released in Jan 2012)

New York, US - youth recidivism (in planning stages)

Merseyside, UK - youth employment (in planning stages)

Official Triodos release:
http://www.triodos.co.uk/en/about-triodos/news-and-media/media-releases/social-impact-bond-for-merseyside/