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14 December 2012
A new social impact bond, designed to alleviate homelessness in London, is the result of an innovative new partnership between corporate investors, a leading charity and the Greater London Authority.
The ‘Street Impact’ programme will be delivered by St Mungo’s, one of the UK’s leading homelessness charities, with the aim of helping 400 people sleeping rough to rebuild their lives away from the streets.
The three-year funding to St Mungo’s is through a Mayor commissioned payment-by-results contract, successfully secured through Triodos Corporate Finance and social investment fund CAF Venturesome.
How it works
The Mayor has agreed the three year payment-by-results contract with St Mungo’s, which will enable the charity to earn up to £2.4m. It is designed to remunerate them for achieving prescribed targets with a group of around 400 named rough sleepers in central, north and west London. The targets include achieving sustained accommodation, reduction in visits to A&E hospital departments, supporting people into volunteering or work, or reconnections overseas.
To enable the cost of programme delivery social investors CAF Venturesome, several socially driven investors and Triodos Corporate Finance raised £650,000 upfront working capital needed by St Mungo’s by way of a social impact bond.
Mike McCall, Executive Director of Operations at St Mungo’s said: “We’re doing this because we want to help people rebuild their lives away from the streets. The social impact bond is a new way of working for us but we have been helping people with complicated alcohol, drug, mental or physical health histories to get their lives back on track for many years and we know that personalised, long term support is what makes the difference. This is an opportunity to really make an impact for some of the most disadvantaged people in London.
London Mayor Boris Johnson said: “The commitment shown by Triodos Corporate Finance is a fantastic example of a private company working with the voluntary sector and not-for-profit CAF Venturesome to help get people off the streets and into the services they need to turn their lives around. As we push on with the challenge of ending rough sleeping in the capital, it will be forward thinking innovative partnerships such as this which will play an increasingly important role in achieving this goal.”
Developing social investment
This is the second payment-by-results project that the Triodos team has completed this year, having also launched the Triodos New Horizons programme with youth service provider Greater Merseyside Connexions Partnership in May. Both have involved raising private sector social investment to help deliver positive social impact to disadvantaged groups of people. The lead institutional investor in the latest bond was CAF Venturesome, who are taking up a board position within the Street Impact project.
Dan Hird, Head of Corporate Finance at Triodos commented: “We are privileged to have worked on this deal with St Mungo’s whose incredible activities on the ground help to transform the lives of homeless people. We are also pleased to have achieved a good blend of institutional and private social investors in this deal which we see as important if future social impact bonds are to address social problems at a meaningful scale.”
Stephanie Poole, Director of Social Investment at CAF said: “Since the contract is on a payments-by-results basis, St Mungo’s will only be paid once it achieves certain goals, so CAF Venturesome stepped in to support this project with the up-front investment needed to get this exciting and innovative project get underway. We are delighted that several individuals have chosen to support the project alongside us.”