The Benevolent Society’s Social Benefit Bond delivers solid results to families and investors
2 November 2016
The Benevolent Society, Australia’s first charity, announced the third year results of its Social Benefit Bond, a five-year social impact bond funded by private and institutional investors and developed in partnership with Commonwealth Bank of Australia, Westpac Institutional Bank, NSW Treasury and the NSW Department of Family and Child Services (FACS).
The overall financial Performance Percentage for the bond has improved– this year it is 19%, which would theoretically provide returns of 6% for capital protected class investors (Class P) and 10.5% for capital exposed class investors (Class E) at the end of the five year bond. This reporting period covers the first two annual cohorts and the partial third annual cohort, from 3 October 2013 to 30 June 2016. Actual returns will be calculated on cumulative results paid at the maturity of the bond.
The Social Benefit Bond supports The Benevolent Society’s Resilient Families program, which aims to help families at risk, families who may be at the brink, to keep children safe in their homes. The aim is to ensure children remain in their own homes wherever possible, although out-of-home care may sometimes become necessary. Last year, at the end of two years in the program, great progress was made with 88% of the families in the program still together.
Resilient Families has improved the safety and wellbeing of all of the children in the 156 families referred to the program since 2013, more than 360 children, and aims to work with up to 400 families by the end of the five years. Since its inception, the program has produced positive results with 21% fewer children entering foster care as compared to the control group. For the Year 2 and partial Year 3 cohorts, there have been 29% fewer Helpline call reports recorded. This defies the nation-wide trend of increasing numbers of children entering out-of-home care and coming to the attention of the child protection system. There were 61% fewer Safety and Risk Assessments conducted for families working with Resilient Families compared to the control group which is a further reduction in demand on the child protection system. These results indicate intensive, family support services provided to vulnerable families at the right time can make a significant difference.
In addition to the solid performance under the bond’s financial and social measures, the Resilient Families program is also showing positive results under the Resilience Practice Framework, which measures overall outcomes for families engaged in the services provided.
Many of the families that have exited from Resilient Families have reported considerable improvements in family wellbeing and have been observed to be functioning at normative levels.
Together with FACS and Treasury, as well as external consulting groups and The Benevolent Society, the evaluation metrics were updated this year to more accurately reveal the performance of the service and provide a more precise depiction of the progress of Resilient Families.
Deputy Secretary NSW Treasury Caralee McLeish said, "One of the really special things about The Benevolent Society bond is that it is a new programme. And on top of it being a new program, we also have it funded through a new instrument, so it's really innovative on a number of different levels.
“What's unique about the social benefit bond is that payments are made on the basis of outcomes, so investors receive a return depending on whether the services keep children safely with their families. That's what it's all about, getting the outcomes. I think that we're getting, most importantly, great outcomes for families and children and that's really helping to deliver on the NSW Premier's priorities to improve child protection. We're also getting great outcomes for investors, and we're getting great outcomes for Government."
The collaborative partnership between Commonwealth Bank, Westpac, NSW Treasury and NSW FACS with The Benevolent Society has developed an innovative, workable framework that will be applicable by others in future. The willingness to work together and collaborate by government departments like Treasury helped create improved circumstances for children.
Westpac Institutional Bank’s Executive Director and Head of Structured Finance, Craig Parker said, “Westpac is proud to be involved in the establishment and ongoing oversight of this important project. The positive outcomes being achieved by the Resilient Families programme are making a real difference to the communities it is designed to service. We are confident that The Benevolent Society’s Social Benefit Bond will become the benchmark project against which others will judge similar projects in the future. Westpac is committed to remain at the forefront of the development of innovation in Social Finance in Australia and is excited at the prospect of introducing investors to similar transactions in the future.”
Commonwealth Bank Managing Director Debt Markets, Simon Ling, said: “We’re so pleased the project has again successfully delivered returns to investors, but just as importantly, supported the inspiring work of The Benevolent Society in providing safe homes to families and communities. We’re confident the progress and achievements of the Social Benefit Bond will pave the way for further innovation in debt markets to support positive social outcomes.”
The Benevolent Society’s Executive Director Annette Chennell, said, “We are proud of these positive results and we clearly believe that family support services reaching vulnerable families early on and provided at the right time make an impactful difference. “
This is an innovative program that is being trialled, so it is entirely appropriate that its progress is analysed and re-analysed over its course. We recognise that we are working with a relatively small sample size under the Resilient Families program, but are keen to work further with FACS to apply the results from the program more broadly. We are very satisfied with the progress of Resilient Families and it underscores a key focus of The Benevolent Society – to keep children away from out-of-home care where possible, and in a safe environment. Having children in out-of-home care – it doesn’t have to be this way. Clearly now we’ve created a social phenomenon that is working. As an organisation with a learning culture, we are always seeking better ways to protect vulnerable people in our society.”
About The Benevolent Society
The Benevolent Society is Australia’s first charity, working as a catalyst for social change for over 200 years. The Benevolent Society provides quality services in the areas of Child and Family Support and Assistance, and assisting older people and Australians with disability to age well and live a healthy life, staying in their homes wherever possible. For more information, please visit www.benevolent.org.au, on Facebook/thebenevolentsociety or on Twitter - @BenevolentSoc.
About Commonwealth Bank
Commonwealth Bank is Australia’s leading provider of integrated financial services, including retail, premium, business and institutional banking, funds management, superannuation, insurance, investment and sharebroking products and services. Commonwealth Bank’s Institutional Banking & Markets (IB&M) division has core capabilities across transactional and working capital banking, debt financing solutions, financial markets and risk management products. The business is responsible for developing and providing products for our corporate clients. IB&M has global reach extends through offices in Auckland, Beijing, Hong Kong, Houston, London, New York, Shanghai, Singapore, Tokyo and throughout Australia.
About Westpac Institutional Bank
Westpac Banking Corporation (Westpac) was founded in 1817 and was the first bank established in Australia. Today, Westpac employs approximately 40,000 people and provides a broad range of banking and financial services, including consumer, business and institutional banking and wealth management services. Westpac's operations comprise four primary customer-facing business divisions operating under multiple brands serving around 13 million customers. Westpac Institutional Bank (WIB) delivers a broad range of financial services to commercial, corporate, institutional and government customers with connections to Australia and New Zealand. WIB operates through dedicated industry relationship and specialist product teams, with expert knowledge in transactional banking, financial and debt capital markets, specialised capital, and alternative investment solutions. Customers are supported through branches and subsidiaries located in Australia, New Zealand, Asia, the United States and the United Kingdom