Australia’s super fund-backed social bond pilot returns 7.5% in first year

Australia’s first social benefit bond (SBB), the A$7m (€4.9m) ‘Newpin’ pilot programme that is backed by institutional investors including NGS Super and Christian Super, has delivered a 7.5% investment return in its first year.

NGS Super, the more than A$5bn fund for 105,000+ community workers, and Christian Super, the A$850m 100% ethical fund, are among the backers of the pilot program designed to test SBBs in the Australian context. Other investors include trusts and individuals.

The New South Wales government last year contracted UnitingCare Burnside, a child and family organisation in the state, for the trial – with funding raised by Social Ventures Australia (SVA), the non-profit organisation established in 2002.

The bond funded Burnside’s New Parent and Infant Network (Newpin), which aims to restore children to their families from care and prevent at-risk children from entering care. It does this by funding an intensive 12-18 month course for mothers and fathers, with strong outcome targets and performance measures.

During the first year, 28 children were returned to their families, and 10 families at risk were helped to prevent their children from being put into care. The results have been certified by consulting firm Deloitte.

Claerwen Little, Director of UnitingCare Children, Young People and Families, said: “A focus on outcomes has improved the quality of our work.” She noted how the project had “brought government, the investmentcommunity and a service provider together in a powerful and innovative way”.
Social Ventures Australia’s Executive Director Ian Learmonth said: “It’s encouraging to see the bond delivering an attractive return in its first year, and to hear the positive personal stories coming out of the program. Tying funding to specific and measurable outcome targets has seen a new rigour embedded in the way this program is run.”

“A focus on outcomes has improved the quality of our work”

“Not only are we tapping into a new source of funding by partnering with investors, we are delivering better social outcomes while providing cost savings to government,” said NSW Treasurer Andrew Constance. He looked forward to continuing success over the next six years, adding, “we’ll continue to look at more opportunities in this space”.

It comes as another NSW social bond, the A$10m Benevolent Society Social Benefit Bond, the second to be implemented in Australia, is also showing early indications of success, the NSW Treasury said.

Earlier this month, it emerged that investors in the pioneering Peterborough social impact bond in the UK – the world’s first – would not get a return this year as hoped as the project had not met government targets.