Australia’s first social impact bond targeting homelessness is successful

> So far this has led to $8.9m in service costs saved by the South Australian Government.

> The Aspire SIB is a $9 million bond which has a life of 7 years.

Extraordinary that in addition to the social impact, this program appears to be heading towards profitability.

Nice to see this actually work. I thought it was an interesting idea back in the day when the Blair government suggested it here in the UK but I doubted anyone would get it working (too much complexity, too hard to value, maybe too easy to just work the metrics). Good news all around.

Paper here: https://apo.org.au/node/318409

tldr; furnishing the homeless with intensive, long-term (if needed) support and rapid access to housing leads to good outcomes- both for them and the broader community.

This is a great idea. I hope that the experiment is successful.

This will only be profitable for investors if it holds out for 8 years, in 2024.

But it seems like it is going well if you look at current numbers.

> 7.75 year bond term.

> 2% pa fixed coupon over 4.75 years, then performance coupon based on level of Trust assets.

> Termination rights for poor performance to limit downside loss to approximately 50% of principal.

Annual reports and figures -

https://www.socialventures.com.au/work/aspire-sib/

2021 report (all years so far have been the fixed coupon at 2%) -

> The Outcome Payment to be made by the SA Government following each Calculation Date is determined as:

> ● 100% of the first $13.5 million of cumulative program savings; plus

> ● 50% of the next $15 million of cumulative program savings; less

> ● all previous payments ($6.89m to date).

> Accordingly, an Outcome Payment of $6.49 million will be paid to the Aspire SIB Trust by the end of 2021.