Social Impact Bonds: A Terrible Public Policy Idea

DAVID MACDONALDCANADIAN CENTRE FOR POLICY

ALTERNATIVESFAMILY SERVICE ONTARIO

MAY 7 T H , 2013

Social Impact Bonds:A Terrible Public Policy Idea

…and why they might be right for you

Need for Social Services: OW & ODSP

Need for Social Services: Employment

Need for Social Services: EI Coverage

Social Services Resources: Charitable Donations

Social Service Resources: United Way

How are corporations doing

The Corporate Cash Hoard

Might corporations move?

Social Impact Bonds in Canada

Federal Government, Nova ScotiaJobsNow in Ontario“in 2006 and I asked the Department how

many homeless we had in this country…I was told 150,000. Three years later … I asked again how many homeless and was told 150,000. Good work had been done – but no real dent had been made.” Minister Finley -- Social Impact Forum Nov 8, 2012

Philanthropy vs. Social Impact Bonds

Social Service Agency

Philanthropist

$10K donation

Government

Don’t pay $2,600 in tax

Financier

Social Service Agency

$10K Social Impact Bond

Government

$11,300 ($10K principal + 13% profit)

SIB proposed benefits

Risk transferEncourage innovative programsAssured government savingsIncreased social services funding

Why SIBs might be right for you

The risks are much higher

Thank you

David@policyalternatives.cawww.policyalternatives.ca