1. Social Impact Bonds: The Next Phase of Third Sector Marketization?
Meghan Joy, PhD Candidate,
Policy Studies, Ryerson university
Dr. John Shields, Professor, Department of politics and public administration, Ryerson university
Tuesday, February 11th, 2014

2. Presentation Overview
Why the Current Interest in SIBs?
SIBs as a Market-oriented Policy Tool
Practical Design and Implementation Challenges
Fundamental Challenges

3. Why the Current Interest in SIBs?
Government
Third Sector
Private Sector
Transform funding and delivery of social policy
Reduce social service costs
Alternative to universal and institutional care
Efficient public investment
Greater transparency and accountability
Political malleability
Immediate and long term payment
Minimal delivery prescriptions
Appeal to large nonprofits
Larger role for foundations
Altruism
Enhance Competitiveness
Service privatization
Access to government policy design and delivery decisions
Consulting firms will see new business opportunities

4. SIBs as a Market-oriented Policy Tool
Marketization
SIBs part of agenda to reform the public sector to operate more like a private business
Alternative service delivery complimented by alternative service funding
SIBs could facilitate privatization of service delivery

5. SIBs as a Market-oriented Policy Tool
Social Innovation
“Proven ideas that work to address unmet needs by applying new learning and strategies to solve these problems” (HRSDC, 2013, 9)
Conceptualization heavily marketized
Framed as alternative to big government
SIBs used to transform nonprofits into efficient and innovative market actors

6. Practical Design and Implementation Challenges
Government
Third Sector
Private Sector
No reduction in bureaucracy and costs
Reduced control over service provision
Problems with evaluation
Cherry-picking further excludes the most vulnerable populations
Could reduce grant and donation funding
Do not have full control over results
Competitive disadvantage in service bids
Demands for evaluation and monitoring
New management and evaluation skills required
Risky for employees and service users
SIBs a risky investment
Risk aversion

7. Fundamental Challenges
Model of philanthropy not intended to displace state run social policy
SIBs may represent privatization with the nonprofit sector used as legitimation
Social problems framed as an individual’s lack of self-responsibility
Social profit organizations may be less willing to operate where they cannot make money

8. Fundamental Challenges
Need to expand, not reduce the vision of what the nonprofit sector does
SIBs can be both empowering and disempowering, freeing and controlling
Need to assess who wins/loses with the broad implementation of this policy tool
Support for the third sector should include stable and long term funding that covers core administrative costs and community engagement and organizing
Provides sustaining foundation for the third sector and empowers nonprofits to be innovative

9. Further Information and Follow-up
Joy, M. & Shields, J. (2013) Social Impact Bonds: The Next Phase of Third Sector Marketization? Canadian Journal of Nonprofit and Social Economy Research. 4(2): Meghan Joy: John Shields: