Province looking for consultant to set up social impact bonds program

Manitoba is taking its first step toward creating social impact bonds, a way to help fund projects with private investments.

Bonds finance social services with private money

The provincial government is looking for a consultant to set up a social funding program. (Brett Purdy/CBC)

Manitoba is taking its first step toward creating social impact bonds, a way to help fund projects with private investments.

The provincial government said Tuesday that it has posted a request for proposals seeking a consultant to set up the social funding program.

"Our government really is proud to create this channel for people donors, people that want to invest and make a social cause or social change and investment," Families Minister Scott Fielding said.

The government wants to find new ways to measure the success of social programs, he said.

"Typically social service organizations really measure the number of people served as opposed to really how effective the programs are. We want to move towards a system where we're performing and we're paying out on success in a more fundamental way."

Social impact bonds involve private investors in helping to finance social programs set up by community groups. If agreed-upon outcomes are achieved, the government pays the investors.

Fielding said this model can provide long-term savings by leveraging private-sector and non-profit expertise to find efficiencies, while funding prevention measures to avoid problems in the future.

Fielding stressed that social impact bonds will not replace government funding for existing programs.

"This is to augment new funding that can come into the system."

Some policy areas government envisions implementing social impact bonds include child welfare, justice, health care and education.

Social impact bonds consultant

The request for proposals will remain open for 30 days. Once the consultant is hired, they will help set the criteria for social impact bonds, assess emerging social impact bonds and find a program to serve as the pilot project and a model for future social impact bonds.

The province hopes to identify the landmark social impact bond within 45 days, then open up the program to more within 180 days.

Under the social impact bond model, intermediaries work with service providers, the government and investors to set goals and performance measurements, as well as determine how investors will be rewarded for their success.

Child welfare system example

Fielding gave the example of the child welfare system, where he said money is tied up dealing with apprehensions and not enough gets spent on prevention and early intervention.

Representatives of the provincial government travelled to Saskatchewan to observe the Sweet Dreams home, which works with mothers and children to prevent child welfare apprehensions.

Regina-based Conexus Credit Union invested $500,000, which was matched by Saskatoon couple Wally and Colleen Mah.

By 2019, Sweet Dreams aims to have 22 mothers and children leave and stay together for a minimum of six months. If 17 to 21 children are kept out of foster care, investors will receive a portion of their investment back, plus five per cent interest, for a profit of $25,000.

They get nothing back if fewer than 17 kids stay with their mothers.

Social service agency concerns

Some social service agencies have expressed concerns about the idea in the past.

Some worry about the impact of putting a dollar value on issues like child welfare or justice. Others worry that investors will demand influence over how programs are run.

Service providers also question how performance measurements will be set.

The NDP MLA for St. Johns questioned the motivation of Premier Brian Pallister's government for taking this approach to funding social programs.

"It really does beg the question, is the premier moving towards privatizing programs and services that governments typically do," she said.

Fontaine said she she is not reassured by promises that the bonds won't be used to replace existing government-funded programming, given the government's history of cutting spending.

Fielding said there is nothing to worry about.

"This is a low-risk way for government to invest in social policy objectives," he said.

Some non-profits might simply want savings reinvested into the programs, while other companies or private individuals might get a return on investment.

"Each is different in terms of what the return on investment looks like," he said.