One of the first Social Impact Bonds (SIB) to successfully tackle youth unemployment and generate a return to investors has been delivered by the pioneering London-based youth charity ThinkForward.
ThinkForward’s three year SIB has funded mentoring support that has helped more than 90% of 1000 disengaged young people across 14 schools in Tower Hamlets, Islington and Hackney into education, employment or training. Impetus-PEF and Big Society Capital invested equal shares of £450,000 and can expect a single figure return on that investment – though the figure is yet to be determined.
Julia Grant, CEO of Impetus-PEF: “These fantastic results have highlighted the value Social Impact Bonds can make to the lives of disadvantaged young people in the UK. For investors they offer a valid investment vehicle that can deliver both a sound financial and social return. For charities, they offer long term funding, allowing charities to focus on delivering consistent results to those that need help the most. The focus on evidencing outcomes can also help to drive better impact management across the sector.
“If the model is to grow, we are keen to see more payment-by-results commissioning opportunities within both central and local government. It’s still early days in the life of SIBs in the UK though and we, along with many other interested parties, are eager to see what further outcomes for young people this model will provide as it is refined over time. We are looking forward to sharing what we have learned through the process in due course to help advance that refinement as much as we can”
Investor returns are directly linked to securing positive social outcomes, including improving, behaviour, attainment at school and progression into further education or employment. The SIB was commissioned through the Department for Work and Pensions (DPW) Innovation Fund in 2012 on a payments-by-results basis.
ThinkForward’s programme places highly qualified progression coaches in schools to provide five years of intensive one-to-one support for children from age 13, where their home lives are chaotic or they have few role models and are at risk of disengaging with society. The coaches, provided by ThinkForward’s delivery partner, Tomorrow’s People, become trusted mentors in a young person’s life, helping them to overcome challenges in and out of school and to build employability skills, aspirations and confidence.
Young people like 18-year-old Jay from Tower Hamlets started the programme with a track record of poor attainment and no aspirations for work. With the support of his coach, Jay is now thriving and working at the London Stock Exchange.
As a result of the long-term funding made available through the SIB, ThinkForward has been able to refine their programme for greater impact and sustainably grow to 14 schools, with the ambition to expand to other areas of the UK identified as being most in need in 2016.
ThinkForward’s managing director Kevin Munday says: ”This is a truly fantastic achievement for the young people we support and our investors. Not only have we been able to demonstrate that ThinkForward’s approach makes a transformative difference to the lives of some of the most disengaged young people in our society but also delivered returns to Impetus-PEF and Big Society Capital. We are pleased and proud to be the first charity to successfully use this model of social investment to tackle the issue of NEETs in the UK.”
Nick O’Donohoe, chief executive of Big Society Capital said: “These SIBs have demonstrated that engaging early with disadvantaged young people can both improve the lives and opportunities of those young people and provide savings to the public purse. The combined forces of experienced charities, forward-thinking commissioners and social investors have the power to unlock similar results in a whole range of areas, from children in care to adults with mental health problems. We now want to see the government taking these lessons and applying them to more outcomes-based commissioning.”
As delivery partner of Thinkforward’s programme over the past three years, Martin Brooks, Tomorrow’s People’s chief executive said: “For far too many years, Tomorrow’s People has been ‘picking up’ the young people who have failed to make a successful transition from education into the world of work. The preventative focus of ThinkForward is its key strength, and to have the opportunity to help shape this programme as delivery partner has only strengthened our conviction that the earlier we intervene with vulnerable young people at school, the better the chances of transforming lives.”