Almost 900 young people living in New South Wales who face barriers to work will be provided with long term support to help them get a job, and have that job ‘stick’, thanks to a new social impact bond (SIB).
Social Ventures Australia (SVA) has partnered with SYC and the New South Wales government to launch Australia’s first SIB addressing youth unemployment.
SVA is raising $5 million to finance the Sticking Together Project, which will provide intensive coaching support over a four year period to approximately 870 people aged 18 to 24 in the Southern Highlands and Shoalhaven, the Illawarra, and the city and inner south in Sydney. These young people, who are unemployed and face high barriers to employment, will be supported by SYC, a not-for-profit that provides employment, training and other youth services.
SIBs offer an innovative approach to financing social service programs, combining the rigour of outcome-based government payments and flexible investor funds to provide working capital with returns linked to program results.
SVA Impact Investing Director Elyse Sainty says this is an exciting opportunity for private investors to make a meaningful difference to the lives of young people, while also receiving a financial return.
“The Sticking Together SIB is expected to improve the job prospects of young people who might have a hard time finding a job, for a whole variety of reasons,” Sainty says.
“Importantly it will focus on the wellbeing of each individual and find ways to improve their motivation and personal self-worth through the lens of home, health and relationships.
“In addition to increased wellbeing, more time spent in work and other productive activities leads to reduced welfare costs, greater lifetime earnings, and a reduction in the use of other government services.”
The Sticking Together SIB is SVA’s fifth, following on from bonds which are addressing diverse social issues including homelessness, mental health, and children in out-of-home care.
Sainty says the strong interest in the SIB model speaks to the appetite among investors to make an impact, fund innovative programs, and make them sustainable.
“If the Sticking Together Project delivers as we expect it to, investor returns should be approximately 7% per annum,” she says. “But even more importantly, hundreds of young people facing long term unemployment will have been supported to break the cycle and engage in meaningful work.”
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