Developing social impact bond to fund affordable housing to Chimo Community Services

Abstract

Chimo Community Services (Chimo from now on), representing in this occasion by Joyce Alisharan, Board Member, has assigned a special project of research for decision making related to developing a Social Impact Bond to fund affordable housing, the process of this work was made focusing research and analysis to have an approach and understanding about Social Impact Bonds its stakeholder and main actors, its process and how it could be applied for Chimo in British Columbia, Canada. Social Impact Bonds (SIBs) also called pay-for-success are an innovative financing mechanism used since 2010 (UK) as a new funding tool for developing social programs. SIBs improve social outcomes while at the same time generate governments saving. SIBs work both with an initiative from the government (or commissioner) or a service provider initiative. The government (or commissioner) hire a third party also called service provider to fill a gap in the provision of social services. The social service operates by the investment from an investor at the beginning of the service. If the service is successful, the government (or commissioner) will pay to the investor a return for the bonds. It pretends to potentiate the private investment in social program. To gather history, the first SIB was announced in the UK Peterborough in 2010 by then Justice Secretary Jack Straw, to finance a prisoner rehabilitation program, its SIB from 2014already delivered expected outcomes, being success for the investors. From 2010 to 2016 it has been created 60 SIBs in different sector such as offenders, homelessness, children, employment and home care distributed in UK, USA, Australia, Netherlands and Canada. Chimo was only clear what service it wanted to do from a SIB, throughout the project, we understand that there is no single model to approach a SIB, that is why we gave an important part of the time of this project for understanding how the SIB works and how it can be carried out by a service provider. We support in the decision making about which model to follow and on the other hand very important was the definition of the target, for this the analysis of the homeless situation in Vancouver was key information for Chimo to make the process of making decision accepting 3 target, the definition of the target is fundamental for the development of business cases, since each one must contain a detailed target, and the needs identified for that specific target, also we contribute with delivering the intervention programs, outcomes metric, etc. After to understand the different process to develop a SIB, Chimo decided to put focus in homelessness market and affordable housing It was created three proposals for pilot Social Impact Bond developing three Business Cases which are the following: Business Case 1: Aboriginal singles mother and children in or out of foster care / Saving area Out-of-homecare, education. Business Case 2: Seniors who are homeless or at risk of homelessness with or without physical or mental issues / Saving area Homelessness, Health care Business Case 3: Youth who are homeless or at risk of homelessness with or without physical or mental issues (general youth, aboriginal youth and children aging of out care) Saving area Homelessness, Health care, Youth care. The business cases were done in detail for each target, each one with different analyzes and sources of information, we made the prototype of business cases used for SIB and once these proposed business cases were completed, they were validated by the leader of the project and then presented to the Board of Chimo, after that will be presented to other institutions such as the Government of British Columbia and BC Housing.