Social impact bonds on YouTube

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.

OMB May 18 memo on pay-for-success

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

McKinsey's report on social impact bonds

McKinsey's Social Sector Office has continued their work with social impact bonds. Yesterday, they issued a 68-page report that analyzes the nascent market for social impact bonds in the United States. This report is part of their larger work on SIBs, which includes:


  • "Will social impact bonds work in the United States?" -  a brief overview of SIBs issued in March 2012.
  • "From Potential to Action: Bringing Social Impact Bonds to the U.S." - This report, issued on May 15, 2012. 
  • Rapid Sustainability Assessment - A toolkit aimed to help potential funders, providers, and intermediaries determine their organization's suitability for participation in the SIB ecosystem. Publication date is TBD.
  • Capabilities Due Diligence - A more thorough evaluation for each of the stakeholders. As I understand, this will focus on due diligence analysis of potential service providers. Publication date on this is also TBD.

Increased state revenue

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.


Kennedy School Review releases new issue

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