Social impact bond (SIB) in Augsburg, Germany

juvat SIBSource:


In September 2013, the Benckiser Foundation Future launched the first German Social Impact Bond (SIB). Services have begun to be delivered under an innovative service model that brings together a range of organisations and interventions with a track record. The services works with young people who have disengaged from education and employment, to help them enter training or employment.

The targeted outcomes are placement of at least 20 members of the target group into work or apprenticeship for more than 9 months during the timeline of the project. To achieve this goal the service delivery organisations will have to work with approximately 100 young people.

The target group is defined as unemployed people less than 25 years old in the Augsburg district with

  • no ongoing or successfully completed apprenticeship;
  • no current school attendance;
  • no current occupation; and
  • no contact with an employment agency over the last two years or no participation in agency programs over the last two years.

Augsburg Eleven

The services are being delivered from the shared workspace project Eleven Augsburg, through the collaboration of four service delivery organisations:


The Bavarian State Ministry of Labour and Social Affairs, Family and Integration (StMAS) will pay for outcomes once they have been achieved. The Ministry holds a contract with special purpose vehicle called Juvat. Juvat, derived from the Latin juvare, translates the central hypothesis of the program: It works. This is a pilot project for the Ministry, which they are referring to as “JuMP – youth with perspective”.

There are four foundations investing in the SIB:BHF-BANK Foundation,BonVenture (a social venture capital fund),BMW Foundation Herbert Quandt , and Eberhard von Kuenheim Foundation – the Foundation of BMW AG. The investment total is not public information.


The law firm Dr. Mohren & Partner  will independently evaluate whether targets have been reached and payments should be made.

Additionally, the Faculty of Economic and Social Sciences at the University of Hamburg will perform a process evaluation.

Resources has released an overview of the SIB in English as a PDF.

Seoul Social Impact Bond (SIB)

On February 18 2014 a press release announced a Social Impact Bond for Seoul. It came from the The Department of Women and Family Policy, Office of Children and Young People, Seoul Metropolitan Government who have signed an MOU with Korea Social Investment. This could be the first Social Impact Bond in Asia, with several other countries also exploring the concept. Continue reading

Social Impact Bonds in the UK: an overview

This is an updated version of the article first published in the 2014 Charity Finance Yearbook. Download the PDF here.


The first Social Impact Bond was developed by Social Finance, agreed with the Ministry of Justice and Big Lottery Fund and began to offer services in 2010. Since then, much interest has been generated from public bodies, investors and social sector delivery organisations at all levels in the UK and overseas. Continue reading

Social Impact Bonds and Pay for Success – are they synonyms?

On a recent trip to the US, I noticed that the discussions around ‘Pay for Success’ were a little different to those I’d been having on ‘Social Impact Bonds (SIBs)’ with other countries. Particularly in the measurement community, there was an idea that Pay for Success took measurement of social programs to a new level: that ‘Pay for Success’ meant paying for an effect size (by comparison to a control group), rather than ‘Pay for Performance’ which paid for the number of times something occurred. Continue reading

Charities want to keep their regulator: Analysis of submissions to the ACNC (Repeal) (No.1) Bill 2014

Submissions to the Senate inquiry into the Bill to repeal the Australian Charities and Not-for-profits Commission (ACNC) closed Friday 2 May, 2014 – 154 were published.

There will be two Bills in the process of legislative change. The first, this one, is to repeal the ACNC Act. The second will be to establish regulatory arrangements in its place. The first bill will not come into effect until the second Bill is published.

This analysis of the submissions to the inquiry contains statistics and quotes from a review of the submissions. If you would like to print a copy, please download the PDF. It is organised under the headings:

  1. Who submitted
  2. Arguments against the Repeal Bill
  3. Support for the Repeal Bill
  4. About the ACNC.

A summary of this information was published as an article, Charities Voice Overwhelming Opposition to ACNC Repeal Bill in Pro Bono News on Monday 13 May.

The most frequently quoted and supported submissions came from the Community Council for Australia and the Queensland Law Society.

[The Creating Australia submission was published twice (numbers 16 and 146) and is thus counted as two submissions.]

Who submitted and what was their position?

Position on the ACNC (Repeal) (No.1) Bill 2014

124 (81%) submissions opposed the Bill and 14 (9%) supported it. Fifteen submissions provided information or made statements to the Senate Committee, but neither stated explicit opposition nor support for the Bill. One submission was confidential.

ACNC 1 Continue reading

Using SROI for a Social Impact Bond

Social Return on Investment (SROI) and Social Impact Bonds (SIBs) are two ideas that are increasingly mentioned in the same breath. SROI is a measurement and accounting framework and SIBs are a way to contract and finance a service. Both require three common ingredients:

  • the quantification of one or more social outcomes for beneficiaries,
  • a valuation of these outcomes, and
  • an estimation of the cost of delivering these outcomes.

While not a necessary ingredient, SROI can contribute to the design, operation and evaluation of SIBs.

*NB the word ‘outcome’ is used here to represent a change in someone’s life – some readers (particularly from the US) may use the word ‘impact’ to mean the same

SIBs and SROI 1 Continue reading

Social impact bond (SIB) research questions

It seems that more and more students around the world are keen to do some research on social impact bonds. Great! But we can do better than ‘Do SIBs work?’ (try defining success first…) or ‘What’s the relationship between financial return and effect size?’ We don’t have the data for questions like this yet, but there are so many other wonderful questions we can be asking. There’s also a lot of data on twitter and in the media that could be used for interesting studies of stakeholder perception and reaction.

If you are a student researching SIBs and would like to be connected with other students, please use the contact form and include your university, level of study and research topic. I will connect you via email with other students around the world. If anyone else has more questions they’d like on this list, please pop them in the comment box.

Some questions

  • What are the effects of publicly announcing a SIB? How does timing affect whether a SIB gets agreed and how long it takes to agree?
  • What are the key characteristics of SIBs that have been announced by haven’t happened? How is this different from those that have happened? What has been the result of these projects e.g. funded by other means, directly commissioned etc.
  • Beyond risk and return: what are investors in social impact bonds looking for and attracted to? On what factors does the success of a SIB fund-raising effort rest? E.g. SVA great brochure, Westpac worked with existing customers, Social Finance builds closer relationships and confidence with investors.
  • Procurement – how do SIBs challenge the assumptions, processes of procurement? Comparison of jurisdictions. Implications for changes in law.
  • What do you procure for i.e. organisation, idea, full blown proposal or service – advantages and disadvantages from cases around the world.
  • Making responses public – e.g. Illinois for their request for information – does this impede or encourage innovation?
  • Appropriation risk (US only?) – how is this quantified, perceived, legislated against and what are the effects of that on a SIB? Conversely, how might the increased profile of a SIB affect appropriation risk?
  • Unstable governments – what are the implications for contractual partnerships in those countries? What’s the financial cost too?
  • Relationship between payment metric, measurement confidence and timing of payments – perhaps already in existing literature on performance-based contracting.
  • The role of guarantees – how does it change perception of what you’re doing by different stakeholders?
  • Who initiates and drives a SIB – how does this shape perceptions of risks and benefits by different stakeholders?

Strongs compressed


Alex Nicholls and I published a set of questions in our Case Study: The Peterborough Pilot Social Impact Bond (2013, published by Saïd Business School, University of Oxfordaround the often overlooked issue of legacy: what happens when the SIB is over. Not all of these are research questions, but studies that go some way to addressing these broader questions might be useful. The following is quoted directly from the paper.

One key question of a SIB is when and why should it end? Other key questions to consider are set out below from the perspective of each stakeholder typically involved in a SIB:


  • How to institutionalise innovation into future welfare programmes and in the wider social services market?
  • If early prevention is successful, how to maintain and fund preventative services after SIB ends? Do SIBs need to ‘rollover’ to produce sustainable change?
  • How can SIB outcomes data (likelihood, effect size, cost of delivery, value or savings to tax payer, related externalities/proxy outcomes) drive better commissioning across government?
  • How to achieve key outcomes post SIB?
  • How to continue to grow the social finance market to fund welfare services?
  • How to report on and share SIB learning and data more widely?
  • How to calculate savings from SIB interventions?


  • How to develop a secondary market exit?
  • How to develop a follow-on SIB investment?
  • How to adjust risk and return dynamically to the availability of new information from SIBs in the market?
  • How to tranche investments in a single SIB according to different risk and return profiles and different personal costs of capital?

Service Providers

  • How to ensure continuity of funding of increased capacity?
  • How to institutionalize SIB performance data?
  • How to build capacity to engage in future SIBs?
  • How to manage on-going collaborative relationships?
  • How to disseminate learning?
  • How to leave a community stronger when a service ends?


  • How to build a pipeline of SIB deals?
  • How to build capacity in providers so that they are stronger for having worked on a SIB?
  • How to continuously innovate?
  • Where to apply SIBs and develop other models that build upon SIB learning?
  • When are SIBs no longer necessary, if ever?
  • How to build a business model, given high transaction costs?
  • How better to segment the investor market to the real, rather than perceived, risk and return opportunities of SIBs?
  • How to manage the involvement of commercial, rather than purely social, investors in terms of expectations of high returns and the potential for risk dumping?

Service Users

  • How to ensure that a service gap does not arise for current participants and relevant future populations/cohorts?
  • How to avoid worse outcomes in the long term?
  • Will improved outcomes be sustained for those who participated in a SIB?

Breakdown of social impact bond investors in Australia

There are two social impact bonds in Australia that have raised investment and are delivering services. They have been called “Social Benefit Bonds (SBBs)” by the New South Wales Government, the state government that initiated them. They are the Newpin SBB and the Benevolent Society SBB and both of them work to strengthen families to ultimately reduce the need for children to be placed in care outside their homes. Investment for both deals was open to wholesale investors upon application. One parcel of investment in the Newpin SBB was transferred to a retail investor in August 2014, so is not shown on the chart. Also interesting to note is that the Benevolent Society, the charity delivering services for one SBB, has invested in the Newpin SBB, as well as in their own. A breakdown of investor types for each SBB is below.

Newpin investor breakdown(Source: Presentation by Ian Learmonth, 2013, p.14)

Bensoc investor breakdown(Source: KPMG Evaluation of the Joint Development Phase of the NSW Social Benefit Bonds Trial, 2014, p.30)

Social Impact Bond (SIB) UK v. world map

These maps and charts are accurate to the best of my knowledge as of November 2015. The images are slightly clearer if you click on them. Will try to keep them up to date, but feel free to give me a nudge if I fail to. I only count Social Impact Bonds that have been agreed by all parties and subsequently announced publicly. Happy to accept corrections!

[I’m currently occupied with other projects, so I recommend the Social Finance (UK) SIB database as the most reliable source of information and counter of SIBs.] 

SIBs launched

UK SIB map

SIB world mapThe references below are for the newer ones – the older ones are best explored through the UK Cabinet Office’s SIB Knowledge Box Case Studies which is a little out of date. Please note my bias towards government announcements over other parties’ – this reflects my personal interest rather than any objective assessment of the materials.

Saskatchewan – Canada

Saskatchewan Govt, 21 May 2014, New Home for Single Mothers Opens in Saskatoon; Funding First of its Kind in Canada

Birmingham – UK

Birmingham City Council – 25 November 2014 news release for service begun August 2014, Innovative approach to finding foster placements.

Augsberg -Germany

Access a PDF overview from the intermediary Juvat or see my blog on this SIB.

Chicago – USA

City of Chicago, 7 October 2014, Mayor Emanuel Announces Expansion of Pre-K to More Than 2,600 Chicago Public School Children

Cuyahoga – USA

Cuyahoga County, 3 December 2014, Nation’s First County-Level Pay for Success Program Aims to Reconnect Foster Children with Caregivers in Stable, Affordable Housing

Massachusetts – USA

Massachusetts Govt, 8 Dec 2014, Massachusetts Launches Pay for Success Initiative to Reduce Chronic Individual Homelessness

Fair Chance Fund – UK

Department for Communities and Local Government (DCLG), 9 Dec 2014, £23 million to help homeless turn around their lives (of which the Fair Chance Fund is £15 million) and specification for tender.

Social investment tax relief for homelessness social impact bonds by Third Sector 5 Feb 2015


EVPA, 6 Feb 2015, First Social Impact Bond launches in Portugal.

Youth Engagement Fund – UK

Department of Work and Pensions (DWP), 19 March 2015, New social impact bonds to support public services (there are two further social impact bonds announced in this press release that have not been fully developed yet – one will be delivered by Social Finance and one by Evidence-Based Social Investments).

Newcastle West CCG – UK

NHS Newcastle West Clinical Commissioning Group (NWCCG) ‘Ways to Wellness’ programme, 27 March 2015,
NHS in Newcastle commits £1.65m to improve long-term health conditions

Santa Clara County – US

County of Santa Clara, 13 August 2015, County of Santa Clara Launches California’s First “Pay for Success” Project

Tel Aviv – Israel

Social Finance Israel, 5 November 2015, Israel’s first Social Impact Bond Gets Underway

Social Investment – supplying and demanding what?

There’s a diagram/framework that keeps being used to describe the social investment market and it drives me mad! [I’m not going to point fingers, but its use is fairly widespread, to the point where some organisations use it to label their computer files…]supply and demand

This diagram assumes that your world revolves around money. When you see it, you are supposed to see a very logical display of: the supply of money; the demand for money; and the things that help these two connect.

But social finance is about more than money. It’s about people and changes in their lives. Social purpose organisations use the words ‘supply’ and ‘demand’ to talk about housing, food, services, blood…

As social finance/social investment/impact investing become more widely discussed and practised, our use of language is central to its development. Whatever our perspective, we need to use as little jargon as possible, communicating meaning effectively. We should ask people to explain what they mean, reduce our use of acronyms and assume that the world view of others is not our own.

The diagram above can be useful if we all understand what it means, for example:

investors and investments

It’s still a little money-centric, but it involves fewer assumptions. Is it clear enough?

Update July 2014

Until now, the bulk of social/impact investment reports have been written by investors, for investors, with a few written by policy makers trying to encourage investors. We’re just starting to see the emergence of publications on social/impact investing written for social purpose organisations. Big Lottery Fund has published Social Investment Explained, beautifully written David Floyd at Social Spider and Nick Temple at Social Enterprise UK, with support from Dan Gregory. It sets the benchmark for communication – its language and structure make it accessible to the organisations that are the basis of the existing and potential market.