Social Impact Bonds (SIBs) are a relatively new way of financing social services in Canada. They differ from the normal way of financing social services in that they are funded initially by private sector businesses or foundations, which are reimbursed by governments after 3 to 7 years only if certain agreed upon performance measures are met.
This study examines the experience of applying Social Impact Bonds to the financing of child welfare both in Canada and in Australia and attempt to draw lessons from that experience both for SIBs generally and for funding child welfare in particular. Three funds are examined: Sweet Dreams Social Impact Bond in Saskatchewan and the Newpin Social Benefit Bond and Benevolent Society Social Benefit Bond, both in Australia.
In previous papers our position has been that governments should avoid SIBs and require performance from all social service spending as a matter of course; we have cautioned against introducing private financing into social service delivery expressing skepticism about its possible impact on overall government spending and on unionized workers. In what follows governments have already made the decision to engage in SIBs. This paper examines the form and extent of that engagement and the lessons that might be learned from it. It deals only with SIBs aimed at keeping very young children out of care. The report summarizes 16 lessons to be learned from the three funds examined and the literature.