Social Benefit Bonds
A Social Benefit Bond is a new financial instrument in which private investors provide up-front funding to service providers to deliver improved social outcomes. If these outcomes are delivered, there are cost savings to government that can be used to pay back the up-front funding as well as provide a return on that investment.
The pilot will test the capacity for Social Benefit Bonds to:
- Increase funding for prevention and early intervention programs in a sustainable manner
- Improve accountability for the effectiveness of expenditure on social services
- Catalyse the development of the social finance sector
- Harness the innovation capacity of both investors and service providers
- Improve the evidence base for, and focus on measuring the impact of, social services.
The NSW Government announced in the 2011-12 Budget that it will establish Australia’s first Social Benefit Bonds to address a range of social challenges facing the State.
On 30 September 2011, the Government launched a Request for Proposal to identify two pilot Social Benefit Bonds in the areas of out-of-home care and recidivism. Interested parties were invited to submit proposals. A market briefing session was held on 11 October 2011. Submissions of proposals closed on 24 November 2011.
The Government announced the proposal outcomes on 20 March 2012.
All NSW Government information relating to Social Benefit Bonds and the Request for Proposal process in NSW will be published via this web page.