"In 2010, an organisation called Social Finance raised £5 million (about $8 million) by issuing bonds to investors. It handed over the money to the St Giles Trust, which counsels offenders while they are in jail and helps them find work when they get out, reducing recidivism by as much as 40 per cent. The trust will put the money to work at the Peterborough prison in Cambridgeshire. If it fails, investors get nothing. If it cuts recidivism by 7.5 per cent, investors start to see returns. And if it does better, the United Kingdom’s justice ministry will pay more, up to a maximum of 13 per cent.
This could be the next big thing in impact investing. Social impact bonds can tackle problems that governments find hard to solve, because elected officials find it harder to fund prevention than cure. David Robinson, a member of the Prime Minister’s Council on Social Action in the United Kingdom puts it thus: “It is difficult to get rid of the ambulance at the bottom of the cliffin favour of a fence at the top.” With social impact bonds, taxpayers pay nothing if society does not benefit.
Read more: http://www.business.in.com/article/isb/impact-investing-harbinger-of-a-brighter-future-and-a-friendlier-bond-market/27862/0#ixzz1WkqjA9r0
No comments:
Post a Comment