Social Impact Bonds
Foster innovative solutions for social problems
About Social Impact Bonds
Social Impact Bonds are new financial instruments that public sector can use to test innovative solutions for pressing social challenges, like unemployment, homelessness, or health related issues.
Public authorities define impact objectives and social organizations design and test new solutions. Interventions are pre-financed by philanthropic or impact investors and public authority pays back only if the contracted impact goals are achieved.
Benefits of Social Impact Bonds
- Reduce government spending as well as financial and implementation risk with new approaches on solving social issues
- Encourage innovation, create transparency on impact results and foster collaboration in social, public and philanthropic sector
- Unlock additional and long-term funding for social interventions
Social Impact Bond in Austria
Goal: To support the independence and quality of life of people with disabilities, and at the same time to empower unemployed women. With professional education and mentoring they are trained to assist disabled people and thus enter into meaningful and flexible employment. For this purpose the platform ava was created: https://ava.services/was-ist-ava/.
Involved actors:
- Austrian Federal Ministry of Social Affairs, Health, Care and Consumer Protection: launched the Social Impact Bond with the aim of implementing innovative digital solutions for long-term social challenges
- Erste Social Finance Holding: is the intermediary and manages the project
- ERSTE Foundation: acts as investor and provides the pre-financing
- atempo: is the non-profit organization delivering the intervention
Timing: May 2020 – March 2024
Overall budget: 300.000 EUR