Not all targets met – but still a success?
At the end of its three-year term, the first Austrian Social Impact Bond has officially concluded. Since one of the predefined targets had not been achieved, the public authorities are not required to reimburse the upfront funding. At the same time, however, it was announced that the project would continue to receive funding and be incorporated into the standard domain of public operation. Does this mean that the SIB project has failed? Or is it a success? In our opinion, it is a definite success.
Shortly before the end of 2018, the three-year SIB project was officially brought to a close. The primary goal of the project was to support women and children who had been victims of violence and to give them the opportunity to become independent of violent relationships by means of employment placement. This included the stipulation that a “living wage” must be secured for at least 75 of these women, which refers to a salary that exceeds a predefined level of income. Overall, the SIB project supported over 300 women and their children. 182 women were placed into positions on the primary employment market, and 29 women received placements on the secondary employment market. Another 16 women were able to start vocational training programs. However, the predefined living wage could not be secured for the required minimum number. Therefore, a key target for the SIB project was not fully achieved, thus invalidating the obligation of the public authorities to refund the financing received in advance from non-profit foundations.
Does this mean that the Social Impact Bond project as a whole was a failure? From our point of view, this is definitely not the case. Here are the reasons this conclusion is based on:
Thanks to the combination of intensive psychosocial care and the appropriate job placement, many more women than expected were provided with opportunities to support themselves independently of an abusive situation. Even though not all of the women could be assured an income that corresponds to the predetermined level, the majority of these women are now able to provide for themselves and their children, and are no longer forced to return to abusive relationships because of financial dependency.
The social service providers were given secure funding throughout the duration of the entire project term, allowing them to develop a customized program for women affected by violence and gear this toward their specific needs.
The non-profit organizations who pre-financed the project invested their money as a “better donation”. Although they are not getting their money back, they have lent their support to a project that has not only been highly regarded but has also proven effective in the long term. Moreover, they have funded a novel type of project approach that has resulted in valuable findings, representing a successful outcome for the selected target group.
- Last but not least, by initiating the SIB project, the public sector was provided with the opportunity to pilote a target-oriented solution to a social problem, thus closing a gap in the existing range of options.
Because the targets were not fully met, the Austrian Federal Ministry for Social Affairs is not obliged to expend any resources for the project. This complies with one of the main prerequisites for a SIB, namely that public funds are only utilized upon achievement of the predefined targets.
Regardless of the attainment of formal targets, the Ministry regards the project as a remarkable success based on the results achieved and the lessons learned; therefore, funding for the program is provided and moreover, it is to be included as part of the standard public program. The relevant press release, which contains further details about the conclusion of the project, is available here (in German).
Even though we as the intermediary did our best to meet the predefined targets together with the other parties involved, we believe that the decision by the Ministry for Social Affairs represents the achievement of another important goal that goes beyond the specific target set for this SIB pilot project: to extend our knowledge about the potential offered by aid programs through the application of target-oriented funding models, thus providing a basis for improving and expanding such support programs. As a result, available public resources can be used to help as many people as possible, as effectively as possible.
For this reason, we believe that the Austrian SIB project is a success.
Our fundamental considerations with regard to the success or failure of a SIB project are outlined in this blog entry.
We will publish additional information about the results of the Austrian SIB project on this blog as soon as the relevant documents become available to us.