Could Manitoba non-profits benefit from private backers?

The Pallister government is touting a private-public funding model as a possible way to finance social programming that would relieve risk otherwise placed on Manitoba taxpayers — but how have social impact bonds fared elsewhere?

Manitoba Families Minister Scott Fielding announced Tuesday the province is looking for ways to measure the efficacy of social programs it currently funds. To that end, Fielding said the government plans to hire a consultant as it moves toward creating social impact bonds in Manitoba.

The bonds bring private investors to the table to help fund social programming run by not-for-profit community organizations. If targeted social outcomes are met down the line, the government pays investors back, plus interest. If the social programs fail to reach agreed-upon goals, investors get nothing.

Manitoba's healthcare, child welfare, justice and education systems have all been identified as areas suitable for social impact bonds, Fielding said.

Saskatchewan

Social impact bonds have been used farther afield since 2010 — in the U.K., U.S., Australia and more.

Premier Brad Wall introduced a social impact bond scheme in Saskatchewan in 2014, and one of the recipients was the Saskatoon Downtown Youth Centre, or Egadz. 

The organization helps at-risk single mothers and their kids — some of whom are victims of domestic abuse — get back on their feet before provincial child welfare workers intervene.

What the social impact bonds did was keep the bureaucracy out of this program.- Don Meikle

"My investors are very successful people and what they want to see is change for the better," said Don Meikle, executive director of Egadz.

Two private investors and a local credit union invested $1 million into a home for single-mothers and their kids run by Egadz. The Wall government promised to pay back the investment on the condition that 17 of 22 of the mothers stayed with their children for six months after leaving the home.

Completion of that goal would net the Saskatchewan government roughly $1 million in savings it would otherwise have spent putting the kids into the province's child welfare system.

Over the past two years, Meikle says Egadz has kept those 22 kids out of care, saving the government about $1.5 million.

"What the social impact bonds did was keep the bureaucracy out of this program," he said. "We just found we need to get the moms and the children at time of crisis and not just let it spiral, so it's been very, very successful for us."

'Pay-for-performance'

The Ontario government recently began exploring "pay-for-performance" social impact bonds for four not-for-profit programs.

Priority areas identified by the province included programs that focused on affordable housing, bolstering supports for at-risk youth and creating opportunities for people with disabilities and others facing barriers to employment.

A preliminary report cited cross-departmental collaboration within government and between community organizations as a high point in the research and planning stages.

"Service delivery organizations were asked to think critically about the qualitative and quantitative benefits of their program, outline a clear outcome, and provide evidence for their proposed intervention," the 2016 report reads.

"Parties were pushed to evaluate data in a more holistic manner and to think creatively about how and where to access data sources."

But the report also states access to data on a variety of social outcomes was complex by nature and "many organizations found it challenging to develop a feasible [social impact bond] idea."

Community organizations that successfully net funding through a committed entrepreneur or corporation could end up with "long, strong, stable funding," said Kate Kehler, executive director of Social Planning Council Winnipeg.

"That could be something they don't often get from the government, especially when always fearing a government change or simply their program becomes out of favour," Kehler said.

Reform, social change needed

At the same time, Kehler hopes the government is genuinely interested in reform in areas such as child and family services and justice, as Fielding highlighted, and not simply looking to off-load its financial responsibilities to community organizations.

"When we have two systems like child and family services with an over-reliance on apprehension, and a justice system with an over-reliance on incarceration — two of the most expensive and least effective answers to our social issues — small community programs can only go so far," she said.

"The social change is what's necessary if we're going to make any progress on this."

Kehler said details from the province are vague at this stage and she wants to know what will happen to organizations that do manage to hit their financial targets a few years down the line.

Fielding said whatever experiments the province runs, social impact bonds won't be used as replacements to government funding for existing programs.