17 June 2013

Developing new impact bonds for charities - London 29th May

Photo by Mars Discovery District (CC Rights)

Lately, the development of new financial tools for social enterprise is becoming an issue of growing importance. On May 27th, Toby Eccles, development director of Social Finance, lead a consultation concerning a new form of funding for charity's activity. The ‘development impact bond’ will follow a model similar to that of the social impact bond, according to the social investment consultancy Social Finance and the US Center for Global Development. The bond will allow charities to run programs to tackle problems in developing countries, funded by social investors.

Programs funders pay out and investors profit, if the charities’ model proves successful. In a joint statement, the two organisations said that a previous working group, chaired by Toby Eccles, Owen Barder, director for Europe at the CGD, and Elizabeth Littlefield, president of the Overseas Private Investment Corporation, had the task to study the "application, challenges and benefits" of a development impact bond. The results showed that the development impact bonds have the potential to improve the effectiveness of traditional development projects by concentrating on implementation quality and the delivery of successful results.

The consultation will close on July the 17th.