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Allia offers social impact bond to support vulnerable children

Howard Lake | 4 February 2013 | News

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Charitable social investment organisation Allia has developed the first social impact bond to support vulnerable children at risk of entering the care system.

The Future for Children Bond will help to fund a programme of family support by Essex County Council for 380 children and their families with the aim of diverting young people from entering care. Since it costs the state up to £180,000 a year to look after a child in residential care, every day that a child does not have to enter care will result in savings to the Council. These cost savings can be used to provide a return to the investors.

Two investments

The Bond combines two investments. There is a low-risk loan to a provider of affordable housing that will return investors’ initial capital; and a high-risk investment in the social impact bond for Essex County Council, which will provide the variable return depending on the success of the programme.

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The Social Impact Bond has already secured £3.1 million of capital commitments from investors including Big Society Capital, Bridges Ventures and Esmée Fairbairn Foundation.

Social Impact Bond

There are 14 Social Impact Bonds in existence or development in the UK. The first was in 2010 for Peterborough Prison.

Until now the Bonds have been funded through private placements with institutional investors, charitable foundations and high net worth philanthropists.  The Future for Children Bond however is the first time a public offer for investment in a SIB has been made.

www.allia.org.uk/futureforchildren
Photo: Gautier Willaume on Shutterstock

 

 

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