Innovation through Social Bonds Offers Results

Wednesday, 13 May 2015, 11:18 am
Press Release: Akina Foundation

Innovation through Social Bonds Offers Results

Innovation in delivering government services through social impact bonds works overseas and could work here too, says Ākina Foundation Chief Executive Alex Hannant.

Responding to today’s release of The New Zealand Initiative’s report Investing for Success: Social Impact Bonds and the future of public services, Mr Hannant said social impact bonds reward results.

“This model of contracting is focused on results – if you can demonstrate you’re making a difference, you receive payment. It’s part of a move to focus more on outcomes and to encourage innovative ways of achieving them. This means identifying where the biggest changes can be made – often in areas where early interventions make sense and save both harm and money down the line; such as reducing homelessness or reoffending.”

Mr Hannant said this model wouldn’t work for every type of social service and care was needed to ensure that compliance costs were not prohibitive, that the system could not be manipulated and that the intention of the service remained at the heart. He said social impact bonds were not the single answer – it was a complementary tool to deliver results alongside other approaches.

“The report shows that social impact bonds are working well around the world in countries like the United Kingdom and Australia but we’d need to take a considered approach to ensure they can also be a success in New Zealand. If they can deliver better results with some of the persistent issues we face, we will all benefit as New Zealanders. Also, by directing resources to the most effective interventions, this enables the Government to make better investments.”

Key recommendations that Mr Hannant endorsed were to provide adequate support to the organisations seeking to deliver services under these new arrangements and the need to have a focal point of leadership across Government rather than individual agencies implementing separately, especially in the early days.

“As a leader for social enterprise in New Zealand, we value the potential that social impact bonds offer to organisations seeking to deliver better outcomes for New Zealand communities – as well as investors who want to enable positive change with their capital without simply giving it away. Seeking to innovate and trying new approaches will lead to better solutions but this work needs to be properly managed and supported. If we get this right, we can empower service providers, grow the pool of social investors, and get better results from taxpayers’ funds.”

Ākina Foundation supports people and organisations that have ideas to drive positive social or environmental change through a social enterprise model - a hybrid organisation type that applies commercial strategies to tackling complex problems in the world. Ākina helps through building capability for early stage ventures, supporting existing ventures to scale-up their solutions and facilitating investment in social enterprise.

ENDS

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