PRN: Omidyar Network Grants $2.1M in Support of Social Impact Bonds
Omidyar Network Grants $2.1M in Support of Social Impact Bonds
REDWOOD CITY, California, May 1, 2012 /PRNewswire/ -- Omidyar Network today announced two grants to help develop the use of Social Impact Bonds to finance lasting solutions to pervasive societal problems.Â Â Social Finance Ltd. of the United Kingdom will receive up to $800,000 over two years, and its U.S. sister organization, Social Finance, Inc., will receive up to $1.3 million, also over two years. Omidyar Network's grants will support the expansion of Social Impact Bonds in the United States, Ireland, Scotland, Australia, Canada and Israel, as well as in the international development sector.
Social Impact Bonds are an innovative financial instrument that connects the social sector to the capital markets. They offer a new means for growth-ready nonprofits to scale proven interventions that improve social outcomes and create taxpayer savings. Aligning and protecting the interests of nonprofit service providers, governments, and investors, Social Impact Bonds raise private investment capital to fund prevention and early intervention programs that reduce the need for expensive emergency-response and safety-net services. Using a "pay-for-success" contracting model, the government repays investors only if and when an independent evaluator determines that the agreed social outcomes have been achieved.
"The potential of Social Impact Bonds are aligned with Omidyar Network's mission to explore market-based solutions to help address society's most intractable problems," said Amy Klement, vice president, investments at Omidyar Network. "The approach allows for an injection of capital into proven and innovative social services, requires government and program providers to focus on results, offers the taxpayer savings, and represents a scalable means of investing in social ventures.Â We are pleased to do our part in helping these two pioneering organizations realize the promise of this innovation."
Social Finance Ltd is a U.K.-based nonprofit with the mission to mobilize investment capital to drive social change.Â It created the Social Impact Bond in 2010 and is leading the development of markets for Social Impact Bonds globally and within multiple sectors in the United Kingdom, including criminal justice, vulnerable children, health and ageing and drug rehabilitation.
"Social Finance UK is delighted to have the support of Omidyar Network to respond to the overwhelming interest in Social Impact Bonds shown by countries across the globe," said David Hutchinson, CEO of Social Finance Ltd.Â "Their backing will enable us to build a strong network of international organizations developing and delivering new models of social finance."
Like Social Finance Ltd, its Boston-based, sister-organization Social Finance, Inc. works to connect the social sector with the capital markets and finance effective nonprofit organizations driving social change.Â Social Finance, Inc. is working with partners in government, the social sector and organizations such as Omidyar Network, to bring Social Impact Bonds to the United States.
Tracy Palandjian, CEO of Social Finance, Inc., said, "During a time of increasing social need and diminishing government resources, it is critical for us to engage the capital markets in enabling social progress.Â Social Impact Bonds have the potential to open up new pools of private investment capital and promote collaboration among innovative states, effective nonprofit programs, and socially-motivated investors to drive social impact. We are grateful for the support of Omidyar Network in helping us develop a performance-based financial instrument that can scale some of our country's most effective solutions."
ABOUT OMIDYAR NETWORK
â¨Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. To date, Omidyar Network has committed more than $500 million to for-profit companies and non-profit organizations that foster economic advancement and encourage individual participation across multiple investment areas, including financial inclusion, entrepreneurship, property rights, consumer internet, mobile and government transparency. To learn more, visit www.omidyar.com.