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Media releases

Investment in Family Support Drives Social Impact

 

19 December 2014

One of Australia’s first social benefit bonds has delivered a positive impact within one year.

The Benevolent Society in partnership with Commonwealth Bank of Australia (CBA) and Westpac Institutional Bank (Westpac) today released the first investor report of the Benevolent Society Social Benefit Bond (“Social Benefit Bond”).

Australia’s first charity, The Benevolent Society established the $10 million Social Benefit Bond in October last year to fund Resilient Families, an intensive family support service that aims to support up to 400 families over five years.

Over the first nine months of operation, the working capital from investors has enabled The Benevolent Society to keep the first cohort 39 of 44 families together, through the Resilient Families Program.

“While it is very early days in the five-year trial, we are very encouraged to have achieved a 17% improvement in our primary goal of reducing the number of children entering out-of-home care in comparison to a control group,” said Wendy Haigh, Benevolent Society Executive Director, Finance and Business Services.

“On two measures we have found a higher than expected number of notifications to the Department of Family and Community Services (FACS). This has brought the performance down in this first period, but as families stay in the program longer, we expect the number of notifications to FACS to decline,” explained Ms Haigh.

Using the formula to be applied at the Term of the Bond, but with results for only part of the first of four annual cohorts, the Performance Percentage at 30 June 2014 would return up to 8% to high risk (Class E) investors and up to 5% to lower risk (Class P) investors.

Caralee McLiesh, Associate Secretary NSW Treasury and Chair of the NSW Social Impact Investment Steering Committee welcomed the results.

“We are all excited about the long term benefits the Resilient Families Service is expected to deliver - for families participating in the service, their communities, the Government and investors. Every effort is being made to support The Benevolent Society for the ultimate success of the Bond,” said Ms McLiesh.

Commenting on the results, Leon Allen, Commonwealth Bank’s Managing Director Government, Health, Education & Social Infrastructure said: “Enhancing the wellbeing of communities is at the heart of CBA’s vision so we are delighted to be actively involved in this unique and innovative social benefit bond offering that is succeeding in its main role: to help support children and their parents.”

“Westpac continues to be excited by the prospects of the Resilient Families programme that is being funded through this Social Benefit Bond.  Core to our strategy is to help shape responses to emerging social issues and to use our expertise to make a meaningful difference in our community. It is clear that this programme is making a difference and it will become the bellwether for similar programmes in the future.  We are confident on the prospects for success in terms of outcomes for our community, the government and our investors,” said Craig Parker, Westpac Institutional Bank’s Executive Director and Head of Structured and Asset Finance.

 “We are at the forefront of an emerging socially responsible asset class and want to encourage more investment nationally in social impact investing to address some of Australia’s most pressing social challenges.  These early results are encouraging and we look forward to improving the lives of many more families through this social benefit bond,” said Mr Leon.

About the Social Benefit Bond
In March 2012, a consortium led by the Benevolent Society, Westpac and the Commonwealth Bank won the New South Wales government tender to issue this bond, focusing on keeping at risk families intact, and thereby reducing the number of children entering the foster care system in New South Wales. The Social Benefit Bond provides investment returns based on reducing the cost to Government of this pressing social issue.

In June 2013, $10 million was raised to fund the establishment of The Family Preservation Service.

For more details on the program visit www.benevolent.org.au