1. avpn.asia AVPN Webinar 17 March 2014 Social Impact Bonds series #1 Jane Hughes Dir, Knowledge Management Social Finance US

2. 77 Summer Street, 2nd Floor, Boston, MA 02110 AVPN PRESENTATION MARCH 2014

3. Our work spans geographies and issue areas; however, our fundamental approach is consistent. 1)Assess the Problem: First, we dive into the problem and ask: a) What is the problem? b) How big is the unmet need? c) Is there an intervention that can improve results? d) Can impact investing play a role? 2)Identify a Social Outcome Financing Solution: If a social impact financing strategy is appropriate, we identify promising ways to finance the expansion of programs with a track record of performance, a strong evidence base, and a focus on outcomes. 3)Shape the Partnership: We develop performance-based structures that align the incentives of government, investors and providers to achieve shared, measurable goals. 4)Raise Capital: We raise capital from impact investors to fund the initiative. 5)Collaborate through Completion: We work over the investment life with all stakeholders to ensure that social and financial goals are met. 3 © Social Finance 2013 WHAT WE DO

4. © Social Finance 2013 4 Social Impact Bond Application Criteria Address a pressing social need with an evidence-based provider Policy priority for government Reputable service providers with proven track record Intervention with measurable outcomes Achieve a positive ROI for Government Financing needs currently not served Net government benefits exceed costs of intervention Acceptable investment time horizon Maintain quality metrics & data Program implementation data Administrative data External evaluation Do no harm SOCIAL IMPACT BOND ASSESSMENT CRITERIA

5. Aligns with most assessment criteria  Aligns with some assessment criteria Evidence-based Intervention Sufficient Net Benefits within Time Horizon Replicable and Scalable Vulnerable PopulationPotential Intervention Justice-Involved Adults and Youth Post-incarceration support and job training to reduce recidivism At-Risk Youth Community-based wraparound services to reduce substance abuse, out-of-home placements, and other problems Low-Income Mothers Prenatal and early childhood support for first time, low-income mothers to improve family success Low-Income Seniors Supportive housing and care coordination to reduce out-of-home healthcare usage  Individuals with Chronic Conditions Preventative care and management of chronic diseases, e.g. education and home retrofits to reduce asthma-related emergencies  Chronically Homeless Persons “Housing first” supportive housing to reduce emergency healthcare and shelter usage  Hard to Employ Individuals Job training for hard-to-employ populations to fill skill gaps  0 – 5 Year Old Children Providing all children with the tools necessary to begin school ready to learn  K-12 Students Support educators working to restart chronically under-performing schools  PROMISING APPLICATIONS

6. 6 AN INNOVATIVE MULTI-STAKEHOLDER PARTNERSHIP Outcome Payer State of New York / USDOL Evaluator / Validator DOCCS Research / Chesapeake Research Associates Service Provider Center for Employment Opportunities Investors Investors invest $13.5mm 1 2 Deliver employment services 3 Achieve outcomes (recidivism, transitional jobs, and employment) 4 Measure and validate outcomes 5 Pay if – and only to the extent that – outcomes are achieved 6 Receive performance- based payment 7 Social Finance NYS Workforce Re-entry 2013 LLC Rockefeller First Loss Guarantee Facility Rockefeller provides 10% first loss protection* *The first loss protection is only available to the Class A-1 investors Intermediary Social Finance Inc. Social Finance structures, coordinates, and manages the project Fund operations Target Population 2,000 High-Risk Formerly Incarcerated Individuals

7. NYS WORKFORCE RE-ENTRY 2013 UPDATE 7 Intervention The Center for Employment Opportunities (CEO) will provide intensive services including training, transitional employment and permanent job placement with the dual goals of reducing recidivism and improving employment for up to 2,000 former New York state prisoners New York state will act as payor of outcomes Public sector savings could equal ~$7.8M Transaction $13.5M investment from impact investors and philanthropy, privately placed via Bank of America Merrill Lynch private wealth platform Investment will assist 2,000 individuals over 5.5 years Payments based on reduction in recidivism and increased employment Outcomes will be validated by independent third party by a randomized control trial Problem Prisoners in New York State have a high likelihood of returning to prison after release, but there are intervention programs that have demonstrated success in reducing recidivism The nation’s first privately placed Social Impact Bond

8. - Please type your questions into the box on the control panel Question & Answer

9. Register for next webinars at: http://www.avpn.asia/events 26 March 2014 Social Impact Bonds #2 Social Ventures Australia, Ian Learmonth, Executive Director of Impact Investing 14 – 15 May 2014 www.avpn2014.com