Australia’s first social impact bond, the Newpin Social Benefit Bond (Newpin SBB), has reached maturity after seven years of operation. The bond was a resounding success, restoring 391 children to the care of their families with an overall restoration rate of 61%, and delivering a financial return of a 10% p.a. to investors.
The success of the Newpin SBB demonstrates how private capital can be used to support and share risk with service providers entering into outcomes-based contracts with government, and can help to alleviate disadvantage in Australia.
Elyse Sainty, Director, Impact Investing and social impact bond (SIB) lead at Social Ventures Australia (SVA) said that as the first SIB in Australia, the Newpin SBB has been a success by any measure.
‘It has been an important “proof of concept”, but more importantly has made a lasting impact on the lives of hundreds of vulnerable children and families.’
SVA CEO Suzie Riddell echoed these sentiments.
‘SVA is immensely proud of the success of the Newpin SBB. With the government’s commitment to expand funding for the Newpin program, we are witnessing the realisation of the potential of SIBs that we saw seven years ago. When governments, service providers, and private investors work in concert to test new social innovations, carefully measure the outcomes, and then scale successful initiatives, we can change the lives of thousands of people in Australia for the better.’
The Newpin SBB was a financial partnership between the NSW Government, Uniting and SVA, and funded the operation and expansion of the Newpin Program in NSW. Although the SIB financing arrangement has concluded, Uniting continues to deliver the Newpin Program under an outcomes-based contract with the NSW Government.
The Newpin Program aims to restore children in out-of-home care to the care of their parents by creating and supporting safe family environments, and to prevent children at risk of significant harm from entering out-of-home care in the first place.
Investors have shown a deep interest in the people behind the mechanics of the Newpin SBB, and over the years have taken the opportunity to visit Newpin centres to meet staff and participants.
Executive Director at Brightlight Group Simba Marekera (formerly of Christian Super Impact Investment, one of the investors to sign-up for the Newpin SBB), said he was captivated by the proposition back in 2013.
‘The investment strongly aligns with our reason for being and allowed us to direct client capital to some of most vulnerable members of our community, creating the opportunity to transform lives.’
Jim Craig from Newpin SBB investor Bellwether Foundation says he is pleased that the Newpin SBB has helped to catalyse change, and brought greater rigour to the measurement and valuation of social outcomes.
‘The Newpin SBB has demonstrated how communities and governments in Australia can benefit from testing and learning from innovative financing structures such as SIBs. It is a great example of how a social program and investment can drive measurable social impact and provide an investment return.’
SVA has played a pivotal role in building the SIB market in Australia, having developed five SIBs, with a further under contract and two currently in development.
The outcomes data and learnings from this program are available in the public domain thanks to annual reporting to investors, and can be leveraged both nationally and internationally.
In the news
Australian Financial Review: Social impact bonds reunite children with their parents
Pro Bono Australia: Australia’s first social impact bond delivers for families and investors
Click here to read the final 2020 Annual Investor Report