UK’s first social impact bond fund achieves £25m close
A £25m fund launched by Bridges Ventures in April 2013 to support charities and social enterprises to deliver social services has successfully closed, the specialist fund manager announced today.
The fund is the first of its kind to be set up in the UK. It provides social investment and support to charities and social enterprises delivering ‘early intervention’ social care programmes in areas such as education, employment, housing and care for vulnerable young people. This could include working with children in challenging situations to improve educational attainment or providing family therapy to avoid vulnerable adolescents being taken into local authority care.
Projects commissioned by the public sector receive money from the Bridges fund on a payment by results basis, according to the Social Impact Bond model. This means that investors only receive returns if specific social improvement outcomes are achieved. And commissioners pay only for outcomes that have improved the lives of beneficiaries. According to this logic governments should be able to avoid bearing the costs of services, which may or may not deliver social outcomes, and save money.
“Early intervention schemes seek to target the root causes of social disadvantage at a fraction of the cost of dealing with the after-effects on society and the economy," said Anthony Ross, head of social sector funds at Bridges Ventures.
"By using SIBs to fund early intervention, society benefits on several levels: commissioners save money by paying only for outcomes that improve the lives of beneficiaries; social outcomes are improved; and the total bill on society is reduced,”he said.
At its closing the fund was oversubscribed, Bridges announced, demonstrating considerable demand from investors for opportunities to support charities and social enterprise under the Social Impact Bond model.
“We are seeing increasing levels of demand for SIBs from the Government commissioners, charities and social organisations, and, encouragingly, investors,” said Ross.
Current investments include ‘It’s All About Me' (IAAM), a programme developed by eighteen voluntary adoption agencies that will support local authorities’ adoption services by finding, training and supporting families to adopt children who are recognised as harder-to-place, and who otherwise would probably remain in care.
The fund is also financing a ground-breaking project commissioned by Manchester City Council and run by Action for Children, which provides multi-dimensional treatment foster care (MTFC) placements, helping young people with challenging emotional and behavioural difficulties move back into family settings. This is the first time SIB funding has been used to fund multi-dimensional treatment foster care (MTFC).