Social Impact Bonds: The Next Phase of Third Sector Marketization?
Keywords:Non-profit organizations, third sector, social impact bonds, social innovation, policy voice
The politics of austerity has pushed the third sector to the centre of attention as governments turn to non-governmental institutions to pick up the social deficits created by economic recession and the state’s retreat from social provision. Some governments have begun supporting alternative service funding through such innovations as social impact bonds (SIBs), a financial product used to encourage the upfront investment of project-oriented service delivery. This paper provides a clearer understanding of what SIBs are and traces their emergence within Canada while linking them to their cross national origins. SIBs are situated conceptually within broader contemporary developments within the non-profit sector, particularly the agenda of public sector reform and third sector marketization. The analysis focuses on the potential impact of SIBs on non-profit policy voice and capacity to represent and meet diverse community needs as it is this function that to a significant degree defines the third sector’s ability to be innovative.
Ainsworth, D. (2011, November 1). Analysis: Can Social Impact Bonds help to create a better society? Third Sector. URL: http://www.thirdsector.co.uk/news/Article/1101352/Analysis-social-impact-bonds-help-createa-better-society/ [June 18, 2013].
Anner, M. (2010). Corporate social responsibility and freedom of association rights: The precarious quest for legitimacy and control in global supply chains. Politics and Society, 40(4), 609-644.
Canadian Task Force on Social Finance. (2011, December). Mobilizing private capital for public good: Measuring progress during year one. Author.
Charities Aid Foundation. (2012, September). Funding good outcomes: Using social investment to support payment by results (‘Putting Practice into Policy’ discussion paper). Author.
Chen, D.W. (2012, August 12). Goldman to invest in city jail program, profiting if recidivism falls sharply. The New York Times, A14.
Clay, R.F. (2013). Health impact bonds: Will investors pay for intervention? Environmental Health Perspectives, 121(2), A45.
Commission on the Reform of Ontario’s Public Services. (2012). Public services for Ontarians: A path to sustainability and excellence. Toronto: Queen’s Printer for Ontario.
(The) Economist. (2013, February 23). Social-impact bonds: Commerce and conscience, a new way of financing public services gains momentum. URL: http://www.economist.com/news/finance-and-economics/21572231-new-way-financing-public-services-gains-momentum-commerce-and-conscience [May 17, 2013].
(The) Economist. (2012, February 25). Playing with fire. 402, 3.
Evans, B. and Fanelli, C. (Eds). (2013). Great recession-proof? Shattering the myth of Canadian exceptionalism. Alternate Routes: A Journal of Critical Social Research, 24 (2013).
Evans, B. and Shields, J. (2010). The Third Sector and the Provision of Public Good: Partnerships, Contracting and the Neo-liberal State. In C. Dunn (Ed), The Handbook of Canadian Public Administration (2nd edition) (pp. 305-318). Toronto: Oxford University Press.
Evans, B., Richmond, T. and Shields, J. (2005). Structuring neoliberal governance: The nonprofit sector, emerging new modes of control and the marketization of service delivery. Policy and Society, 24 (1), 73-97.
Fiennes, C. (2013, April 3). What the first social impact bond won’t tell us: Two views on evaluating the pilot SIB in Peterborough, UK. Stanford Social Innovation Review. URL: http://www.ssireview.org/blog/entry/what_the_first_social_impact_bond_wont_tell_us [May 16, 2013].
Fooks, G., Gilmore, A.B., Smith, K.E., Collin, J., Holden, C. and Lee, K. (2011). Corporate social responsibility and access to policy elites: An analysis of tobacco industry documents. PLoSMed, 8(8), 1-12.
Fox, C. and Albertson, K. (2011). Payment by Results and Social Impact Bonds in the criminal justice sector: New challenges for the concept of evidence-based policy? Criminology and Criminal Justice, 11(5), 395-413.
Government of Canada. (2013). Economic Action Plan 2013: Jobs, growth and long term prosperity. Ottawa: Author.
Government of Canada (2012, November 8). The Government of Canada is Taking Action to Address Local Challenges. URL: http://www.actionplan.gc.ca/en/news/government-canada-taking-action-address-local [May 16, 2013].
Hanlon, R.J. (2011). Engineering corporate social responsibility: Elite stakeholders, states and the resilience of neoliberalism. Contemporary Politics. 17(1), 71-87.
Hayes, S. (2012, February 15). Social Impact Bonds and small organizations--solution or nemesis? The Guardian. URL: http://www.guardian.co.uk/voluntary-sector-network/2012/feb/15/social-impact-bonds-small-organisations?newsfeed=true [May 16, 2013]
Hilton, M. and J. McKay (Eds). (2011). The ages of voluntarism: How we got the Big Society. Oxford: Oxford University Press.
Human Resources and Skills Development Canada (HRSDC). (2013, May). Harnessing the power of social finance: Canadians respond to the national call for concepts for social finance. Ottawa: Author. URL: http://www.hrsdc.gc.ca/eng/consultations/social_finance/report/index.shtml [June 18, 2013].
Institute for Government. (2010). The state of commissioning: Preparing Whitehall for outcomes-based commissioning. Moss, I: Author.
Ishkanian, A. and Szreter, S. (Eds). (2012). The Big Society debate: A new agenda for social welfare? Cheltenham, UK: Edward Elgar Publishing.
Kelly, K. and T. Caputo. (2011). Community: A contemporary analysis of policies, programs, and practices. Toronto: University of Toronto Press.
Kirkpatrick, P. (2011, December 21). Is Payment by Results compatible with the Big Society? Third Sector. URL: http://guest.thirdsector.co.uk/2011/12/21/is-payment-by-results-compatible-with-the-big-society/ [June 18, 2013].
KPMG LLP. (2010, June). Payment for Success--How to shift power from Whitehall to public service customers. Downey, A., P. Kirby and Sherlock, N: Author.
Liebman, J.B. (2011). Testing Pay-for-Success bonds. Public Manager, 40(3), 66-68.
Lieutenant Governor of Nova Scotia. (2013, March 26). Turning the Corner to a Better Future. Throne Speech. URL: http://nslegislature.ca/index.php/proceedings/throne-speech/ [July 12, 2013].
Loxley, J. (2013, January). Social Impact Bonds. Canadian Centre for Policy Alternatives Review (Economic and Social Trends).
MaRS. (2012). Case studies in social innovation: MaRS centre for impact investing. URL: from http://www.marsdd.com/articles/case-studies-in-social-innovation-mars-centre-for-impact-investing/ [July 6, 2008].
McBride, S. and Whiteside, H. (2011). Private affluence, public austerity: Economic crisis and democratic malaise in Canada. Halifax: Fernwood.
National Council for Voluntary Organizations (NCVO). (2011, November). Payment by Results (Discussion Paper). Author.
National Development Team for Inclusion. (nd). Be bold: Developing the market for the small numbers of people who have very complex needs. Carrier, J.: Author.
Ontario Government and Ontario Trillium Foundation. (2011). The Partnership Project: An Ontario Government strategy to create a stronger partnership with the non-profit sector. Toronto: Authors.
Ontario Trillium Foundation. (2011). Measuring the Economic Impact of the Not-for-Profit Sector. URL: http://www.otf.ca/en/knowledgeSharingCentre/economic_impact.asp [July 6, 2013].
Ontario Ministry of Research and Innovation. (nd). Ontario’s Innovation Agenda: Seizing Global Opportunities. Toronto: Author.
Osborne, S. (2010). The (new) public governance: A suitable case for treatment. In S. Osborne (Ed). The new public governance? Emerging perspectives on the theory and practice of public governance (pp. 1-16). London, New York: Routledge.
Osborne, D. and Gaebler, T. (1992). Reinventing government: How the entrepreneurial spirit is transforming the public sector. Reading, MA: Addison-Wesley.
Preston, C. (2012, November 9). Getting back more than a warm feeling. The New York Times, F.1.
Richmond, T. and Shields, J. (2004). NGO restructuring: Constraints and consequences. Canadian Review of Social Policy, 53(Spring/Summer), 53-67.
Salamon, L. (1995). Partners in public service: Government-nonprofit relations in the modern welfare state. Baltimore: John Hopkins University Press.
Shields, J. (in press). Constructing and ‘liberating’ temporariness in the Canadian nonprofit sector: Neoliberalism and nonprofit service providers”. In R. Latham, V. Preston and L. Vosko (Eds). Liberating temporariness? Migration, work and citizenship in an age of insecurity. Montreal: McGill-Queen’s University Press.
Shields, J. (2013, June). Nonprofit engagement with provincial policy officials: The case of Canadian immigrant settlement services. Paper presented at the 1st International Conference on Public Policy, Grenoble, France.
Shields, J. and Evans, B.M. (1998). Shrinking the state: Globalization and public administration “reform”. Halifax: Fernwood Publishing.
Social Finance. (2011, November). Reducing reoffending among short sentenced male offenders from Peterborough prison. London: Author.
Struthers, M. (2013, June). Fair Exchange: Public funding for social impact through the non-profit sector. Toronto: Metcalf Foundation.
United Kingdom Cabinet Office. (2013, May). Achieving social impact at scale: Case studies of seven pioneering co-mingling social investment funds. London: Author.
Von Glahn, D. and Whistler, C. (2011, June). Pay for Success programs: An introduction. Policy and Practice, 19-22.
Webster, R. (2012). Everything you wanted to know about Payment by Results but were afraid to ask. URL: http://content.yudu.com/Library/A1vzv4/Everythingyouwantedt/resources/index.htm?referrerUrl=http%3A%2F%2Ffree.yudu.com%2Fitem%2Fdetails%2F490992%2FEverything-you-wanted-to-know-about-Payment-by-Results. [May 16, 2013].
Wolk, A. (2011, October 25). What Social Impact Bonds mean for nonprofits and performance measurement. Root Cause. URL: http://rootcause.org/blog/what-social-impact-bonds-mean-nonprofits-and-performance-measurement [May 17, 2013]
Young, N.M. (2011, May). Outcomes are ‘easily manipulated’ in Payment-by-Results contracts. civilsociety.co.uk. URL: http://www.civilsociety.co.uk/finance/news/content/9162/outcomes_are_easily_manipulated_in_payment-by-results_contracts [May 16, 2013].
Submission of an original manuscript to the Canadian Journal of Nonprofit and Social Economy Research / Revue canadienne de recherche sur les OSBL et l'économie sociale [thereafter ANSERJ] will be taken to mean that it represents original work not previously published, that it is not being considered elsewhere for publication; that the author is willing to assign copyright to the journal as per a contract that will be sent to the author just prior to publication and, if accepted for publication, it will be published in print and online and it will not be published elsewhere in the same form, for commercial purposes, in any language, without the consent of the publisher.
The journal takes the stance that the publication of scholarly research is meant to disseminate knowledge and, in a not-for-profit regime, benefits neither publisher nor author financially. It sees itself as having an obligation to its authors and to society to make content available online now that the technology allows for such a possibility. In keeping with this principle, the journal will published all of its issues online.
Authors who publish in the ANSERJ agree to release their articles under the Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 Canada Licence. This licence allows anyone to copy and distribute the article for non-commercial purposes provided that appropriate attribution is given. For details of the rights an author grants users of their work, please see the licence summary and the full licence.