Can I SIB this?

March 13, 2013 Emma Tomkinson Social Impact Bonds, Social Innovation

As interest in SIBs grows and the number of SIBs increases, it can be interesting to explore what could potentially be contracted using a SIB structure.

Can SIBs only be applied to services? If a SIB was used to purchase goods, what would it add? Most payments for goods occur after goods are delivered and deemed to be of a satisfactory standard, which is usually only a short period of time after they have been requested. Grey areas like infrastructure or consulting project might be more interesting to consider. Government has experimented with several variations of performance-enhancing contracts for infrastructure projects including Public-Private Partnerships and bonus payments for on-time completion. However we have yet to see Government tender not for an output, such as a highway or rail line, but for an infrastructure outcome without e.g. the construction of a transport solution so that people in A can get to B at any time of day in less than 30 minutes. Perhaps due to the allocation of land for infrastructure projects, this is something we will never see. Consulting projects are sometimes contracted on the basis of the receipt of a good, such as a report. Will we ever see consultants paid for outcomes such as the improvement in a process if recommendations are accepted and implemented, or the increased confidence of the commissioner to make a decision, or the increase in public understanding on a topic after publication?
Can SIBs only be applied to services with a social impact in the country they are delivered? The name certainly suggests a focus on social impact. There has been discussion of ‘environmental impact bonds’ and there is a history performance-based contracts in environmental management. Social Finance has begun work on ‘development impact bonds’ for the distribution of overseas aid. The Greater London Authority homelessness SIB also makes payments for accommodating homeless people in the countries from which they came.

Can SIBs only be applied to prevention and early intervention? Certainly a shift of funding towards prevention and early intervention services was a key focus in early publications about SIBs, and has been used to justify all SIBs established so far. But does that mean that a SIB could not be used to deliver acute care? The line between prevention and acute care isn’t always so easy to draw. One area that could be suitable for a SIB is palliative care, where the delivery of medical services in the home might be more desirable for the patient and less expensive. It could be argued that these services ‘prevent’ a patient from requiring hospitalisation which is typically regarded as acute care, but palliative services delivered in the home may also be considered acute care. Prison is usually considered ‘acute care’, yet the manager of Her Majesty’s Prison Peterborough has suggested that all prison contracts be made on the basis of a single reoffending outcome, which could easily be structured as a SIB. It could be said that the SIB model will only work financially if the cohort receiving services are predicted to have high future costs to Government, but a SIB could also work if the cohort has high alternative costs to Government, should the SIB not be delivered.

Can SIBs only be applied in a service ‘gap’? There are several reasons it is easier to introduce a SIB into a service gap. It might make it easier to convince government officials to accept the programme, easier to measure a result, easier to deliver and easier to attribute a result to a particular service. But a SIB could be used to deliver an existing contract. The contract could be redesigned with payments based on outcomes that may or may not represent an improvement in the service, depending on how well current services are perceived to be delivered. Or one (or more) of a number of similar contracts could be delivered via a SIB, with payments based on equivalent or improved outcomes.

Do SIBs have to make savings? SIBs may be more attractive to Government or other commissioners if they produce savings. As seen above, however, a commissioner may recontract a service with a SIB in order to improve or account for the outcomes of the service, rather than to create savings.
Can SIBs only be applied to service areas where there is an evidence base? The evidence base of similar programs in a service area enables investors, commissioners and service providers to estimate the potential range social outcomes for their SIB and likelihood of achieving them. They will also use the evidence base to form eligibility requirements for the SIB, to design the most effective service possible, estimate the cost of services, choose partners and providers, and design the measurement system. But SIBs may provide an unprecedented opportunity for Government to try new services or new delivery organisations that don’t have the evidence base, as they only pay if they produce the desired outcomes.

Can SIBs only be applied to a large cohort? If the payments made by Government are based on the outcome difference between cohort and a comparison group, then the group needs to be large enough for this measurement to be statistically significant. That is, there is a high degree of confidence that the effect was due to the services delivered. This was a consideration in the development of the Peterborough measurement system. Subsequent SIBs have introduced smaller cohorts with payments made on individual outcomes as they happen, with payment size reflecting the historical likelihood of outcomes occurring without services.

Can SIBs only be applied to service areas where commissioners want to spend AND investors want to invest AND service providers want to deliver services? Absolutely, the only real constraint to a SIB is that all parties agree to it. This assumption is closely related to the definition of a SIB. There may be service areas that will never be attractive to one or more of these parties. As more SIBs develop, it will be interesting to discover which services these are and monitor any adverse effects on these services and the people who benefit from receiving them. In order to secure the participation of all three parties, they will need to be confident that the SIB will achieve its desired outcomes. It will be easier to agree a SIB if it includes:
• High likelihood that the cohort will want to engage with services
• Eligibility or referral criteria that are clear and objective
• An outcome that can be objectively measured
• A close relationship between the outcome and costs to Government
• Sufficient data to predict the outcomes for the cohort with and without effective services
• A small cost of intervention in relation to potential benefits to Government

Social impact bonds: different places, different motives

March 12, 2013April 29, 2016 Emma Tomkinson Social Impact Bonds SIBs, social impact bonds

world map — *[Map sourced from www.freeworldmaps.net]*

While all jurisdictions that have publicly expressed interest in SIBs recognise a range of common objectives, each has different drivers and emphases. Common objectives across jurisdictions include increasing focus on prevention and early intervention, allowing Governments to only pay for proven services and building a social finance market. But Australia is highlighting the benefits of measurement, while the UK is using SIBs to enable voluntary and community organisations to access Government contracts and in the US SIBs are being promoted as a means of scaling evidence-based programmes.

At last November’s Social Finance Forum in Sydney, speakers involved in developing social impact bonds (or social benefit bonds as they call them) highlighted the benefits of “innovation, capacity building and using data to measure and improve service outcomes” (Tomkinson, 2012).

In the UK, however, the benefits of social benefit bonds as currently defined by the Centre for Social Impact Bonds are:

• they allow commissioners to attract private investors to fund early and preventative action on complex and expensive social problems
• they enable new services to be tried without commissioners having to pay if they don’t work
• they can help services to adapt so that they have a greater emphasis on prevention
• they can allow greater flexibility for those providing the services to adapt and change the service according to their experience
• they can help charities and social enterprises bid for and manage ‘payment by results’ (PbR) projects – projects where the government pays the provider of the service for the results achieved

There’s much less emphasis in the UK on SIBs’ measurement of outcomes as a means for Government to become more accountable for its spending and increase the evidence base for its wider programmes. There is a transparency and accountability agenda in both jurisdictions, but SIBs have not been promoted as central to this movement in the UK.

In Australia, there’s much less emphasis on SIBs as a means for social purpose organisations to attract funding, perhaps because of the larger size of some charities in Australia and their history of winning Government contracts.

In the US, there seems to be a focus on the use of SIBs as a way to bring evidence-based programmes to scale. This has not been promoted as a key driver for interest in either the UK or Australia, although all jurisdictions have acknowledged that savings can only be realised when effective programmes are implemented at scale.

McKinsey in the US presents SIBs in their 2012 Report in terms of scaling programmes. “SIBs are structured to get proven solutions to scale with no risk to public budgets—governments pay for the solutions only if they work. But despite this risk shifting, a SIB’s structure involves several actors—each charging a fee or return. As a result, this tool is a more expensive way to scale programmes than if government simply contracted directly with a service provider”

Excerpts from public releases in several jurisdictions are presented below.

The Peterborough SIB was initially promoted with an emphasis on:
• Service reform: “As part of our radical approach to rehabilitation we are considering a range of payment by results schemes like the Social Impact Bond” (MOJ and Social Finance, 2010)
• Collaboration and innovation: “They will enable foundations, social sector organisations and government to work together in new partnerships to define social problems and transform the way many social outcomes are achieved.” (Social Finance, 2009)
• Involvement of voluntary and community sector organisations in delivering public services: “We want to actively involve individuals and voluntary and community organisations” (MOJ and Social Finance, 2010)
• Increased funding for social purpose organisations: “The Social Impact Bond has the potential to unlock an unprecedented flow of finance for social sector organisations” (MOJ, 2010)
• Aligning incentives: “The Social Impact Bond aligns the interests of government, charities, social enterprises and socially motivated investors around a common goal” (MOJ and Social Finance, 2010)
• More effective services: “Reducing reoffending is one of the Government’s highest priorities” (MoJ, 2010)
• Prevention: “The SiB is designed to fund preventative approaches to social issues” (Social Finance, 2010)

The briefing pack for the New York City SIB put forward the following benefits:
• A focus on outcomes: “Investing in outcomes to improve the lives of those in need”
• Efficiency of funding: “Government is able to preserve public resources for successful interventions while still encouraging innovation in a time of fiscal constraints. Savings can be recaptured and reinvested into a permanent funding stream for the programme”
• More effective services: “Accelerate adoption and implementation of promising programmes”
• Accountability and evidence: “Brings added discipline to measuring outcomes for government programmes because there is an upfront agreement on how to measure success”
• Increased funding for social purpose organisations: “Nonprofit providers receive a committed funding stream not subject to budget cuts”
• Social investment: “Can produce financial returns for private investors, who assume the risk while achieving a public good”
• Increased funding for social programmes: “Taps into new funding opportunities”
• Risk transfer: “Taxpayers only pay for interventions that work”

The Essex County Council SIB was released with the following justifications in the press release:
• Service reform: “Social Finance hopes that the Essex Social Impact Bond will catalyse systemic change in public services for vulnerable adolescents”
• More effective services: “new social care model to deliver improved services and support for our most vulnerable young people”
• Sustained funding for service providers: ‘Stable funding from the Social Impact Bond allows us to work with Essex County Council over the longer term to produce real results that will benefit children, families and communities”
• Innovation: “Essex has always strived to be innovative and forward thinking and it is this attitude that has allowed us to explore social investment.”

The Government of New South Wales, Australia, has outlined its interest in SIBs on its website.

“• A focus on outcomes rather than outputs: Under traditional purchaser-provider arrangements, Government payments typically attach to units or blocks of service rather than the outcome the Government is seeking to achieve. In contrast, SBBs provide a direct financial incentive to focus on and improve the outcome in question. This change benefits both the Government and providers: the Government gets better outcomes, while providers are relieved of burdensome reporting to Government about service inputs and outputs, and instead are free to focus on delivering the outcome in a way that best suits their own approach and preferences.
• Additional resources towards early intervention: Releasing Government funds for prevention and early intervention can be difficult when resources are oriented towards acute and crisis services. SBBs allow an expansion of investment in early intervention through the use of upfront private funding. If successful, this reduces later demand for acute services and frees up Government funds, part of which can then be used to repay investors.
• Innovation: Payment for results, rather than delivery of a prescribed service, frees service providers and investors to explore different ways of achieving better results. Providers have the flexibility to change service delivery approaches or experiment with a number of approaches at the same time. Investors have an incentive to work with providers to drive performance; for example, by encouraging providers to abandon approaches that are not achieving results and supporting them to find and implement new approaches.
• Improving the evidence base: SBBs will be more attractive to investors if they are backed by evidence that indicates that the proposed interventions will be successful. Further, the link between payments and results necessitates the robust measurement of outcomes. These features increase locally relevant evidence and data for future policy makers. By improving measurement in these areas, the Government believes that other social policy areas will benefit as well.
• Accountability and transparency: The focus on clear outcomes measurement in SBBs ensures that there is clarity about what NSW Government funding is achieving, and when.”

Do Social Impact Bonds (SIBs) work?

Image December 5, 2012April 27, 2013 Emma Tomkinson Social Impact Bonds SIBs, social impact bonds

I’ve heard this question asked (and answered) quite a lot recently.
Every time, I just think ‘work at what?’

Does a SIB work if it manages to get three parties in a room to sign a contract and agree on a price for one outcome? Therefore, can a SIB be said to have worked before it begins to operate?
Does a SIB work if outcomes are improved for the beneficiaries involved? If money flows from governments to investors?
Does a SIB work if a service provider has correctly under-estimated its ability to change an outcome?
Does a SIB work if the majority of people involved in it report a positive experience?
If governments save money?
If governments get better value for money?
If service providers feel they are better able to pursue their mission?
If we learn?
If we change?
Or perhaps SIBs work if we don’t need them anymore in 5 years!

I’ve listed below 22 reasons that have been given for SIBs as they have been announced around the world. Success could be defined by any of these points.
Better programs and better results for the people who participate in them
1. Improving results for beneficiaries by focussing on outcomes rather than outputs
2. Improve the likelihood of delivering real and sustainable solutions to important social challenges
3. Making effective interventions available to far more people in need than the number that can be reached through traditional state contracts and philanthropy
4. Harnessing the innovation capacity of both investors and service providers for publicly funded services
5. Adding discipline to measuring outcomes for government programs because there is an upfront agreement on how to measure success
6. Improving the evidence base for social services, by mandating measurement and publication of outcomes
7. Accelerating the adoption and implementation of promising programs
8. Accelerating the expansion of evidence-based programs delivered by effective nonprofits
A social finance market
9. Unlocking funds to tackle social issues
10. Growing the social finance and social business sector
11. Providing new financial instruments to harness private investment for the benefit of the community
12. Enabling investors to achieve financial returns and social impact
Government
13. Increasing funding for prevention and early intervention programs in a sustainable manner
14. Improving accountability and transparency for publicly funded services
15. Allowing governments to accept and measure new ideas from external providers, only paying for the ones that deliver
16. Saving Government money
17. Lowering risk for government
18. Savings can be recaptured and reinvested into a permanent funding stream for the program
Service providers
19. Increasing accessibility of payment by results contracts
20. Giving nonprofit providers a committed funding stream not subject to budget cuts
Collaboration
21. Aligning the interests of beneficiaries, nonprofit service providers, private investors, and governments
22. Facilitated coordination with organisations working on overlapping problems

Do SIBs work? What do you mean when you say “Do SIBs work”?

Ministry of Justice (UK) innovation pilot invites the market to design new financing mechanisms

September 7, 2012March 10, 2013 Emma Tomkinson Social Impact Bonds, Social Innovation, Social Investment & Finance Doncaser Prison, Ministry of Justice, payment-by-results, Peterborough SIB, social impact bonds, UK Innovation Pilot

This pilot was put on hold (indefinitely) by the new Justice Secretary as he introduced his widespread probation payment-by-results program

In August 2011, Minister for Prisons and Probations, Crispin Blunt MP introduced the innovation pilot programme with

It has, for too long in my view, been held that Whitehall knows best. I can only imagine how dispiriting it must be for well-intentioned organisations to try to influence the government and come up against what must sometimes seem like an impenetrable barrier… The government has listened and is not shying away from creating a market for public service delivery that is open to this innovation.

The briefing presentation that went with this includes:

a request for proposals that are of sufficient size for payment and evaluation, focus on outcome measures, create incentives to intervene with the entire cohort and use measurement as a trigger for payments
an intention for at least one pilot to result
an allocation of £20m for success payments
outlines of Peterborough SIB and Doncaster Prison payment by results contracts

Following this, in December 2011, the Ministry of Justice (UK) released an open tender asking organisations to propose both innovative funding and service delivery models to tackle reoffending called Payment by results – innovation pilots. These pilots are on top of six other payments-by-results pilots they are running.

What’s interesting about this?

This is the first tender I’ve seen where a government is open to market suggestions for financing mechanism to reward outcomes. We might see new payment by results mechanisms.
Prior to this, the only government organisation to run a competitive process for a Social Impact Bond had been the NSW Government with their Social Benefit Bonds Trial. This tender goes beyond that and is open to any payment by results financing model.
Innovation = new = increased perceived risk. The Ministry of Justice has a decade-long history of tying payment rewards and penalties to their prison management contracts and was the first government organisation to implement a Social Impact Bond. It also broke ground with its Doncaster Prison payment-by-results contract, where 10% of contract payments are tied to a single reoffending indicator. It will be interesting to see how the risk of new financial mechanisms may be reduced, for example by cornerstone payments or existing programs with strong evidence behind them. Or the risk of new programs may be offset by a more established financial mechanism.
Justice is leading the field in payment by results initiatives around the globe. Employment services contracts used to be the most innovative. Which service area will be next to emerge and how far can payment by results be feasibly extended?

The official tender information on Payment by results – Innovation pilots was released in December 2011. Prequalification questionnaires were submitted in January 2012 and organisations then engaged in developing proposals.

Both lots contain the text:

We seek to develop the market for payment by results through innovative forms of finance and strong involvement from voluntary and social enterprise organisations, including smaller organisations and; as part of the payment by results programme of pilots learn what works and develop a broader evidence base to support design of future policy.
Contract duration is dependent on proposal details. We expect pilots to run for no less than 2 years and no more than 6 years. Up to 20 000 000 GBP has been identified for rewarding successful outcomes of innovation pilots. This funding for outcome payments is for the whole innovation pilots programme. The potential for a small amount of start up funding or working capital is also available. MoJ will consider providing working capital, the precise amount to be negotiated as part of the contracting process.

Lot 1 is looking for programs for short term prisoners that are an

innovative approach to tackling re-offending of offenders who have served a sentence imposed by a Court and have been released from sentences of less than 12 months.

And Lot 2 asks proponents to define their cohort for an

innovative approach to tackling re-offending of offenders; we will accept proposals that focus on offender cohort and any size cohort.

The tender will be awarded to

the most economically advantageous tender in terms of the criteria stated below:

1. Operational service delivery. Weighting 20

2. Commercial financial. Weighting 203. Partnership & stakeholders. Weighting 15

4. Commercial legal. Weighting 10

5. Supply chain management. Weighting 10

6. Implementation. Weighting 107. Human resources & organisational change. Weighting 5

8. ICT & information security. Weighting 5

9. Continuous improvement. Weighting 5

12 points of interest in the New York (Rikers) Social Impact Bond

August 19, 2012August 1, 2015 Emma Tomkinson Rikers Island, Social Impact Bonds, Social Innovation, Social Investment & Finance Bloomberg, Goldman Sachs, New York, social impact bonds, US

There was no hype before the Social Impact Bond (SIB) was announced – this is in contrast to other Governments who have announced their intention well before finalising details. Perhaps the deal was developed quickly, which may well be the case with Bloomberg controlling both the philanthropic guarantee and political appetite. Or perhaps the parties didn’t want to announce before they had signed the contracts, avoiding the pressure of having to live up to an announcement of intention.
In addition to a press release, the City of New York released a briefing pack outlining the justification, partners, program and payment terms of the SIB. The terms of Government payment are clearly set out, unlike in the Peterborough SIB. For a new funding mechanism, this certainly promotes understanding.
It’s called a Social Impact Bond- Obama’s administration announced funding for “pay for success” bonds and the NSW Government has branded them Social Benefit Bonds. Using the same term as Peterborough makes it clear that they follow the same model and helps keep related literature together.
Bloomberg Philanthropies guarantees it – they’ve only guaranteed $7.2m of the $9.6m Goldman Sachs investment, but having the guarantee reduces investor risk and may be one of the key factors in getting this deal finalised. It’s not clear under what terms the guarantee is paid or what happens to it if it’s not required. The fact that it’s a grant seems to suggest that MDRC would repurpose it. This also means that like Peterborough, if outcomes are not achieved, there is no payment of public monies.
The Goldman Sachs payment to MDRC is described as a loan – people often ask of SIBs “Are they debt or equity?”. In fact, they are neither, they are multi-party contracts. Payments from Government are due to an outcomes-based contract. The private investor is really buying a futures option. Classification as debt sheds light on how Goldman Sachs will account for this investment. It also may suggest that Goldman Sachs will take a hands-off approach. If this is so, the benefit of investor skills and incentive are not transferred through to the service providers. This transfer has historically been referred to as one of the reasons for involving external investors, but we’ve yet to see a SIB where investors have a relationship with service providers.
Similar to Peterborough, there is a third-party, independent evaluator. This may prove to be an essential feature of all SIBs as they emerge.
The intermediary is MDRC, a research centre – the strengths of MDRC are in program evaluation and design. Intermediaries in other SIBs bring financial investment or service delivery experience to the SIB. In NSW, the intermediary role will be played in part by banks and not-for-profits, as well as by the intermediary Social Finance (no relation to the UK or US Social Finance).
The payment terms state that a 10% reduction in recidivism is the threshold for investors to break even, although when cost of capital is factored in, this will represent a loss. It is not clear what the 10% reduction is in relation to i.e. what the comparison group is. The SIB also uses stepped payment terms, rather than a sliding scale, which is simple and unambiguous.
There is value in being a first mover – the press releases announces the “Nation’s First Social Impact Bond Program”. There is a conflict between the kudos received for being a first-mover and the confidence gained by waiting to see how other SIBs turn out. It will be interesting to see whether SIBs become more popular and mainstream, or whether development of this model will slow once its novelty wears off.
Benefits to nonprofit providers are described in the briefing pack as “a committed funding stream not subject to budget cuts”. The literature that exists on SIBs describes the major benefit to be providers being the flexibility afforded by focusing on outcome, rather than current prescriptive Government contracts. This could be a sign that MDRC will be prescriptive in what it asks of the two providers, or that prescriptive contracts are less of an issue in this jurisdiction.
Is there conflict between innovation and evidence? The briefing pack justifies the SIB as “encouraging innovation in a time of fiscal constraints”. The idea that SIBs encourage innovation by allowing Government to pay only if outcomes are achieved might be one for the long-term market only. At the moment, the reputational risk of failure to all parties and intense media scrutiny has resulted in SIBs providing services with a strong history and evidence-base that may require strict adherence to service models. These services are so safe they would be ideal candidates for a direct outcomes-based contract with a provider. The real innovation occurring here might be in how the delivery partners have to work together towards agreed outcomes.
They’re creating a pipeline – the press release refers to an August 2 request for expression of interest for additional social impact investment projects by the City of New York. This would suggest that a pipeline of proposals will be established, but I haven’t been able to find the request anywhere. It would be interesting to see whether outcomes are suggested and priced, in the manner of the NSW Government, or whether this will be up to the market.

How do we get super funds involved in social investment?

July 23, 2012July 25, 2012 Emma Tomkinson Social Impact Bonds, Social Investment & Finance Social Benefit Bonds, social impact bonds, social investment, superannuation funds

In Australia, superannuation funds are large and growing, so they’re the ideal social investors of the future. But super funds are also highly regulated and risk averse. And rightly so – we don’t want fund managers taking huge risks with our super! So there are two options. Firstly, we can lower the risk of social investment products to suit the requirements of funds. Secondly, most superannuation funds offer their clients a choice of options with different risk and return profiles. There’s an opportunity here to allow clients to chose to invest a portion of their super in social investment options, although we may not quite be there yet…

Phillipa Yelland’s article in today’s Investor Daily, Jury still out on Social Benefit Bonds, questions whether Social Benefit Bonds are good investments, interviewing Nick Ryder from NAB and Peter Murphy from Christian Super. Ryder neatly summarises the SBB concept and notes that we’re looking at a class of investment that do “not necessarily require people to choose between being a philanthropist or an investor”.

Murphy’s reservations have to do with the SBB’s complexity, the difficulty of understanding the metrics and using Social Return on Investment (SROI) figures. These reservations reflect where the SBB scene is at in Australia right now: we have three SBBs under development in New South Wales, none in the rest of the country, and none operational. We can’t fully understand the risk to investors until the terms, structure and the metrics of the SBBs under development have been decided on. The use of SROI is a separate issue. While it will be useful and meaningful to know the full social return of the SBB investments, returns to investors and Governments are unlikely to be calculated using this method. Investor return depends on outcome change, measured in a way that is closely related to costs Government is able to avoid. SROI itemises outcome change for all stakeholders and gives each of these a value. The basis of an SBB is limited the value of the outcome change for one stakeholder – the Government body funding it.

Will we see more randomised controlled trials in social program evaluation?

July 17, 2012July 17, 2012 Emma Tomkinson Evidence-based policy, Social Impact Bonds, Social Impact Measurement outcome measurement, randomised controlled trials, randomized controlled trials, RCTs, Social Benefit Bonds, social impact bonds

Randomised controlled trials are the preferred measurement method for the NSW social benefit bond (social impact bond) trials. The Coalition for Evidence-Based Policy published an overview and demonstration of rigorous-but-low-cost program evaluations in March 2012. The publication highlights the use of randomized controlled trials (RCTs) with administrative data systems, providing a number of examples from existing studies. RCTs are widely considered best practice with respect to program evaluation.

New useful social impact bond tools from Nonprofit Finance Fund and McKinsey

July 15, 2012July 17, 2012 Emma Tomkinson Social Impact Bonds, Social Investment & Finance

A couple of useful tools came out of the US recently (where they call social impact bonds “pay for success” bonds) and are hosted on the Pay For Success Learning Hub. The Rapid Suitability Questionnaire would be quite good to give participants an idea at the start of what they’ve got themselves into and what they need to do to get ready for a bond. The Capabilities Due Diligence Tools could be a bit overwhelming if looked at too early. I think their greatest value will be as an item bank from which relevant points can be pulled at different points! It’s not clear from the tools who might be submitting information to whom, although there is a clear assumption that responses will be scored and compared against other organisations. It’s not clear what process would lead to this situation – perhaps the kind of government Request for Proposal we saw in NSW? A due diligence tool to help service providers and intermediaries to ask for government information would be very useful and might include referral mechanisms, business as usual arrangements for comparison groups and historical data to estimate outcome change/effect. The two tools are described on the website as below:

Rapid Suitability Questionnaires (RSQs)

RSQs are assessments consisting of 10-15 questions that evaluate organizational suitability and readiness to pursue a SIB model. There are seven different questionnaires customized for each of the stakeholders involved in a transaction. RSQs may be used as a self-assessment or a review of potential partners and are designed to help facilitate productive conversations between the various parties involved in a SIB.

Capabilities Due Diligence Tools

Capabilities Due Diligence Tools provide a detailed framework to assess core capabilities for participation in a SIB transaction. They will identify strengths and gaps in readiness and are customized for service providers, intermediaries, and project evaluators. These tools are designed to support advanced discussions and lay the groundwork for collaboration across the multiple stakeholders involved in a SIB transaction. Each set of tools includes six downloadable modules that structure a due diligence process for assessing the readiness of different stakeholders to participate in a transaction.