Social benefit bonds

NSW Social Benefit Bond Trial

We launched a trial in September 2011 to test the capacity for social benefit bonds to:

  • Increase funding for prevention and early intervention programs sustainably
  • Improve accountability for the effectiveness of expenditure on social services   
  • Catalyse the development of the social finance sector
  • Harness the innovation capacity of both investors and service providers
  • Improve the evidence base for, and focus on measuring the impact of, social services.

The bonds and the services they fund will be evaluated to see if the above aims are achieved and to learn from the trial. Reports will be publicly released as they are completed.

This section explains the process and timeline of the trial so far and more detail on each of the bonds.

The Story So Far

Feasibility study

In 2010, the NSW Government commissioned the Centre for Social Impact (CSI) to determine the feasibility of social benefit bonds in NSW. CSI concluded that juvenile justice and parenting skills for at-risk families were suitable policy areas for a pilot in NSW. Read the full report from CSI. We announced our intention for a pilot program as part of the 2011-12 Budget in September 2011.

Procurement phase 1: Request for proposals

We opened a Request for Proposals (RPF) process for up to two pilot social benefit bonds in September 2011. Applications closed at the end of November 2012. We received 11 proposals in the areas of out-of-home care and recidivism. Most proposals were made by non-profit organisations from NSW.

Procurement phase 2: Joint development phase

We selected 3 proponents to enter the joint development phase in March 2012:

  1. UnitingCare Burnside (out-of-home care)
  2. A consortium of the Benevolent Society, Westpac and the Commonwealth Bank (out-of-home care)
  3. Mission Australia and Social Ventures Australia (recidivism).

The purpose of the joint development phase was to work with the proponents to develop the financial instruments and the service arrangements for each bond. It was expected to take six months, but took closer to 12. An independent evaluation of the joint development phases for the two out-of-home care bonds was conducted at the end of 2013. The evaluation report outlines the planning and development of both bonds and the lessons learned by all participants in detail.

The recidivism bond did not proceed beyond this phase and is not included in the evaluation. The decision not to proceed was based on the aggregate challenges and risks of the proposed model, including the evolving nature of the justice and corrective services policy environment. The NSW Government appreciates the goodwill and efforts of Mission Australian and Social Ventures Australia in the development of the model. We have all learned a lot from the experience and these lessons will inform future social impact investment activities.

Implementation and evaluation phase

The Newpin Bond

We signed a contract with UnitingCare Burnside for Australia's first social benefit bond in March 2013. Social Ventures Australia marketed the bond, which was fully subscribed and closed earlier than expected. Read the information memorandum for potential investors. Services commenced on 1 July 2013.

Results for first 2 years

In the 2 years to 30 June 2015, Newpin restored 66 children to their families. This is a cumulative restoration of 61.6% compared to a baseline of 25%. The program also prevented children in 35 families from entering care. As a result, investors received a 7.5% return in the first year and an 8.9% return in the second. Read the investor reports for 2013-14 and 2014-15.

The Benevolent Society Bond

We signed contracts for our second bond in August 2013. The bond was marketed by Westpac and fully subscribed by October when the Benevolent Society began delivering services. Read the information memorandum provided to potential investors.

Cumulative results

The success of the Benevolent Society's Resilient Families Service will be measured at the end of the 5 year bond when payments are due to investors.

The Newpin bond

Newpin is a program delivered by UnitingCare Burnside (UCB) that aims to break the destructive cycle of family relationships that lead to abuse and neglect. The program provides intensive support to improve parenting. It helps parents build positive relationships with their children. Newpin aims to prevent children from entering out-of-home care and bring families safely back together. It is a program with a solid evidence base and track record of successfully restoring children to their families.

UCB, Social Ventures Australia (SVA), NSW Treasury and the NSW Department of Family and Communities(FACS) jointly developed a social benefit bond to fund an expansion of the Newpin program in NSW. SVA and UCB raised $7 million from investors for the bond. UCB will use this funding to deliver the program from four existing centres and new centres opened over the length of the 7 year bond. FACS will refer clients in need of support that could benefit from the program. More information on the structure and details of the bond can be found in the information memorandum for the Newpin social benefit bond.

The bond’s key performance indicator is the restoration rate of children who enter the program. This rate is the proportion of children referred to the Newpin program that are returned from out of home care to their families. The level of return to investors is determined by this rate. All family restorations are independently decided by the NSW Children’s Court. Neither UCB nor investors make these decisions.

The Newpin bond targets a financial return of 10-12% per annum. In the 2 years to 30 June 2015, Newpin has successfully restored 66 children to their families and supported another 35 families to prevent their children from entering out-of-home care. The cumulative restoration rate is 61.6% over 2 years compared to a baseline of 25%. In 2015, this delivered an 8.9% return to investors, building on a first year return of 7.5%.

For more information on the Newpin bond, please contact:

Social Ventures Australia (investment information)
Ian Learmonth
+61 2 8004 6729
+61 407 673 759

UnitingCare Burnside
Sally Cowling
+61 2 9407 3228
+61 402 853 883

The Benevolent Society bond

The Benevolent Society bond is a joint venture of the Benevolent SocietyWestpac Institutional Bank and the Commonwealth Bank. The $10 million bond will operate over 5 years to deliver the Resilient Families Service to up to 400 families and their children in NSW. The service will be delivered by the Benevolent Society. It works with at-risk families for up to 9 months, with an initial 6 week intensive period where staff build trusting relationships and address immediate crises in a family. Together, staff and families will deal with issues like:

  • unstable housing
  • debt problems
  • regular income
  • domestic violence
  • substance misuse
  • family functioning and relationships.

Over the long term, they work together so that changes will last, and families are able to cope with future challenges and use other community services to help them.

The Benevolent Society uses a Resilience Practice Framework, which incorporates professional practices and approaches that have been proven to be effective. In addition, the initial phase of the service has strong similarities with the successful US model, Homebuilders. Research into the program has shown that Homebuilders achieved significant improvements for families whose children had previously been in care or who had prior substantiated child protection reports.

Returns for this bond will be paid when the five year bond expires, subject to the performance of the program. Progress reports will be made to investors periodically. For more information on the structure and detail of the bond, read the information memorandum for the Benevolent Society bond or the presentation to investors, which summarises the memorandum.

For more information on the Benevolent Society bond, please contact:

Westpac Institutional Bank (investment information)
Craig Parker
+61 2 8254 9116
+61 419 268 691

The Benevolent Society

Browse the FAQs for more information about the NSW Social Benefit Bond Trial.

Evaluating the trial

Evaluation is a critical component of NSW’s social benefit bond trial. Principally, we want to know if the trial has achieved its objectives, which are outlined below:

  • Increase funding for prevention and early intervention programs sustainably
  • Improve accountability for the effectiveness of expenditure on social services   
  • Catalyse the development of the social finance sector
  • Harness the innovation capacity of both investors and service providers
  • Improve the evidence base for, and focus on measuring the impact of, social services.

In addition to assessing the trial, we will examine the services involved in each bond from development to implementation, including the social outcomes for families that are not measured as part of the bond structures. As a result, we will commission multiple evaluations across the life of the trial, the results of which will be available on this site.

Our approach to evaluating the NSW social benefit bond trial is to examine both the structure and the services of each bond in operation.

Evaluation reports for the NSW social benefit bond trial

Social Benefit Bond trial

The Newpin Bond

The Benevolent Society Bond


What is a social benefit bond?

A social benefit bond is a financial instrument that pays a return based on the achievement of agreed social outcomes. Private investors provide upfront capital to cover the cost of delivering a service to improve a particular social outcome. Achievement of this outcome should reduce the need for, and therefore government spending on, acute services. Part of the resulting public sector savings are then used to repay investors' principal investment and provide a financial return. The repayment of the principal and the level of return is performance-based, which means it depends on how much outcomes have improved.

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Are they used elsewhere?

Yes. Social benefit bonds, or social impact bonds, were first developed in 2010 by Social Finance UK with the UK Ministry of Justice to rehabilitate offenders from Peterborough Prison. There are now 40 bonds in development or operation worldwide, with several more in the pipeline (source: Instiglio, as at 26 September 2014). Read more about social benefit bonds elsewhere.

The NSW trial is the first in Australia and one of the first in the world. There has also been interest in bonds elsewhere in Australia. They have been discussed in:

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Why is the Government doing this?

We're trialling social benefit bonds because we think they can help to:

  • Shift the focus onto outcomes rather than outputs: When Government purchases services, it usually pays for outputs (e.g. the number of people using a service) rather than outcomes (e.g. the effect of the service on those using it). In contrast, bonds provide a direct financial incentive to focus on and improve the outcome in question. This should achieve better outcomes for individuals and families, ensure Government gets value for money, and encourage providers to focus on delivering services in a way that meets the needs of their clients.
  • Direct additional resources towards early intervention: Funding prevention and early intervention can be hard when resources are usually directed at acute and crisis services. Bonds allow more investment in early intervention with the use of private capital. If successful, this reduces later demand for acute services and frees up Government funds, part of which can then be used to repay investors. Remaining funds can be re-directed to other services.
  • Encourage innovation: Paying for results, rather than the delivery of a prescribed service, frees service providers and investors to explore different ways of achieving better results. Providers have more flexibility to change how they deliver a service or experiment with a number of approaches at the same time. Investors have an incentive to work with providers to drive performance; for example, by encouraging them to abandon approaches that are not achieving results and supporting them to find and try new approaches.
  • Improve the evidence base: Investors are more likely to find social benefit bonds attractive if the services they finance are backed by evidence of their effectiveness. Further, the link between payments and results compels the robust measurement of outcomes. These features increase the collection of locally relevant evidence and data for future policy makers. By improving measurement in these areas, the Government believes that other social policy areas will benefit as well.
  • Ensure accountability and transparency: The focus on measuring outcomes in bonds ensures there is clarity about what NSW Government funding is achieving.

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If this is such a good idea, what doesn't the Government just fund it directly? Is it more expensive to pay the private sector?

When the Government compares different funding options, we consider cost effectiveness, not just direct cost. This means we consider the comparative benefits that can be 'purchased' for a sum of money. Social benefit bonds have an advantage over current funding models because our payments (in the form of principal repayments and reward payments) are linked to the benefits achieved.

Another benefit of this model is that by attracting private capital, we can fund services over and above what is available from public funds. If the funded intervention is successful, additional public funds are then freed up to repay the upfront expenditure by the private sector.

This is why the NSW Government is committed to supporting a social impact investment market. It provides a new source of funding for these much needed programs and outcomes.

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Why is the Government supporting investors to profit from social programs?

We are hopeful that social benefit bonds can achieve better social outcomes and value for money for NSW taxpayers. The non-profit sector faces increasing demands for services. It is simply not possible for the NSW Government to fully fund every program. Through bonds, we can direct more investment into services to support individuals and families, and link our payments to the outcomes those services achieve.

Social impact investment challenges the traditional view that you can only 'do well' or 'do good.' It is based on a principle of 'blended value' that private capital can deliver social good. Bonds direct private capital towards public benefit, and provide private returns linked to the public benefit achieved.

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What are the potential benefits for the NSW Government?

The benefits for the NSW Government are the same as those for NSW taxpayers:

  • Better outcomes by providing a direct financial incentive for a service provider to focus on and improve the outcome in question.
  • More investment in early intervention, which, if effective, also reduces future demand for acute services and frees up public funds for other priorities.
  • Limits the risk to Government of funding programs which are not effective.
  • Improves the evidence base and availability of robust data for policy makers.

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How does a social benefit bond differ from government grants/contribution schemes?

Most government grants and contribution schemes generally provide funding based on the inputs and outputs of social programs. As a result, they are largely commissioned on the basis of cost rather than on the value they provide or the outcomes they achieve. Grants and contribution schemes generally provide one-off or recurring cash payments to cover program costs.

A social benefit bond is generally based on funding outcomes, like reducing reoffending or the number of children in out-of-home care. They generally leverage private capital and cross-sector partnerships by aligning the interests of multiple stakeholders to achieve positive social outcomes. This encourages innovation and flexibility to provide services to better achieve outcomes. The need to measure outcomes ensures accountability and adds to the evidence base of policies and services that work.

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How is a social benefit bond different to a Waratah Bond?

A social benefit bond is intended to save the Government money while improving social outcomes. Part of these savings will provide repayments to investors commensurate with the outcomes achieved. The remaining savings can be used to fund other services.

The NSW Waratah Bond Program offers low risk, stable income to investors. Money raised through issuing Waratah Bonds is used to fund investment in NSW infrastructure and other public sector activities.

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What happens to a social benefit bond if the Government changes after an election?

The robust performance measures of a social benefit bond provide a true mechanism for governments to pay for results achieved and to save taxpayer money. They also increase the number of preventive interventions facilitated by the Government and offer a mechanism to scale up proven preventive programs without requiring government agencies to take on the upfront funding. Additionally, bonds provide incentives to make cost effective decisions to maximise outcomes. Given this, it is unlikely that a change in government would result in the termination of any bonds.

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What is the status of the NSW social benefit bond pilots?

On 27 March 2013, the former NSW Treasurer Mike Baird and the former NSW Minister for Family and Community Services Pru Goward announced the NSW Government had signed Australia's first social benefit bond contract. The Newpin bond will fund UnitingCare Burnside's New Parent and Infant Network (Newpin) program that works intensively with struggling families to keep them safely together. On 4 June 2013, Social Ventures Australia announced they had successfully raised the required $7 million to finance the bond, one month before the scheduled close.

On 19 August 2014, NSW Treasurer Andrew Constance and NSW Minister for Family and Community Services Gabrielle Upton announced the Newpin bond delivered a 7.5% return to investors in its first year, while improving supports for parents of children in, or at risk of entering, out-of-home care. The $7 million in working capital from investors allowed UnitingCare Burnside to run intensive courses for parents, and to successfully restore 28 children to their families from out-of-home care in the first year of the bond.

Newpin's second year results have been similarly positive and were announced on 20 August 2015. Over the first 2 years of the program, Newpin restored 66 children to their families and prevented children in 35 families from entering out-of-home care. This result generated an 8.9% return to investors in the second year.

On 13 June 2013, the NSW Government signed the contract for the second bond pilot for a Resilient Families Service (RFS) provided by The Benevolent Society. The aim of the RFS is to strengthen family functioning and relationships, and ensure children's safety and wellbeing in order to prevent children entering into out-of-home-care. The $10 million bond was implemented in October 2013 and it is anticipated that the service will assist up to 400 families over the 5 year term.

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How do the Newpin and Benevolent Society bonds fit with other Government services and programs?

The Newpin bond focuses on restoring children to families and preventing children from entering out-of-home care. The Benevolent Society bond will also work with vulnerable families and their children to keep them safely together. Children in out-of-home care often have poorer outcomes than their peers. These bonds are part of a broad range of reforms to improve services and lives for children and young people in out-of-home care.

Social benefit bonds are an exciting new way of building innovative partnerships with the non-government sector and investors to deliver measurable and outcomes-based services. They help raise money for important earlier intervention and intensive services that otherwise might not receive funding due to limited Government resources.

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Why did it take so long to develop the pilot bonds?

Social benefit bonds are a new financial model, with many interrelated components to be understood. The government's commitment to social benefit extends to learning, sharing knowledge, and developing the capacity of all organisations involved in launching the bonds. The process to develop the two pilot bonds was thorough, and ensured that the Newpin and the Benevolent Society bonds are robust, transparent and financially well-structured.

The development of future bonds and other social impact investments will benefit from the knowledge built and care taken in developing these pilot bonds.

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What financial or legal risk would our organisation face by participating in a social benefit bond?

It is envisaged that the financial risk associated with a social benefit bond is borne primarily by investors. The bond issuer (the organisation providing or overseeing provision of the services) may also choose to take on some financial risk and share in the financial return from a successful bond. The precise structure of each bond will be determined collaboratively during its development.

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How will outcomes be measured? How can you be sure measurement is accurate?

Key performance indicators and corresponding Government payments for the current pilot bonds were agreed in the joint development phase and included in the agreements to establish the bonds. Independent certifiers have been commissioned to verify the measurement of performance against the agreed indicators and the payment that are due. Dispute resolution arrangements were also agreed before the start of each pilot.

A lot of work was needed to ensure the chosen indicators are an accurate reflection of the agreed outcome, that they cannot be 'gamed', and do not create perverse incentives. Specific arrangements depend on the bond.

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Where can I get more information about investing in social benefit bonds?

The NSW Government has signed contracts for the implementation of two pilot social benefit bonds, the details of which are above. Information on any future bonds will be made available on this website. Investors and organisations interested in participating in a social benefit bond or other social impact investment should speak to their financial advisor or contact a social impact investment intermediaries.

Specialist Australian intermediaries include:

There are also other intermediaries. The NSW Government does not endorse or recommend any of these organisations.

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Can you recommend further background material on social benefit bonds?

Yes. Check out the Tools and resources section for more information.

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Social benefit bonds elsewhere

Over 40 social benefit bonds have been commissioned globally since 2010. Variations on the social benefit bond, like development impact bonds and green bonds, are also emerging.

This section summarises notable developments in bonds globally. Detailed case studies are available through Social Ventures Australia. Trackers are also available at Instiglio and Finance for Good.


The first Belgian social impact bond was launched in April 2014 to reduce unemployment among young migrants in Brussels. This bond is a partnership between:

  • Actiris, the Brussels employment agency
  • Duo for a Job, a non-profit
  • Kois Invest, an intermediary that secured investors for the bond.

Duo for a Job will match migrant job seekers with experienced local retirees for 6 months to help connect them with local networks and find a job. Actiris will pay back investors their principal, plus a return if pre-established objectives are met.


Launched in May 2014, Saskatchewan's Sweet Dreams project is a CAD$1 million social impact bond to fund a new supported living home for at-risk single mothers with children under 8 years. 

EGADZ's Saskatoon Downtown Youth Centre helps mothers with affordable housing and support to complete their education, find a job, or participate in life skills training and parenting classes. Outcomes will be independently assessed at the end of the 2nd, 4th, and 5th years of the agreement. Primary investors are Conexus Credit Union and Wally and Colleen Mah.


Benckiser Foundation Future launched the first German social impact bond in September 2013. The bond funds an initiative called JuMP (or 'youth with perspective'), which aims to help disengaged young people enter training or employment. Services will be collaboratively delivered by four service providers.

The bond attracted investment from four foundations, though the size of the bond is unknown. The Bavarian State Ministry of Labour and Social Affairs, Family and Integration will pay for the outcomes achieved by the providers (source:


After a lengthy development period, the social finance provider Clann Credo issued an investor memorandum in 2014 to raise €500,000 for Ireland's first social impact investment. Finance will be used to help 136 families in Dublin transition from emergency homeless accommodation into more sustainable housing. Focus Ireland will deliver services as part of their existing Homeless Action Team, while outcome payments will be made by Dublin City Council.

Investor applications closed in January 2015. Further progress is unknown as of June 2015.


Social Finance Israel has announced its intention to develop social benefit bonds in the following areas:

  • employment opportunities for the ultra-orthodox community
  • employment opportunities for Arab citizens of Israel
  • prisoner rehabilitation
  • reducing the development of type 2 diabetes in high risk pre-diabetics
  • higher education.

These bonds are in the exploration and design phase.

New Zealand

As part of the 2015 Budget, the New Zealand Government announced NZ$28.8 million for 4 'social bond programs', with the first to deliver employment services to people with a mental illness. The NZ Ministry of Health is leading the development and procurement process.


Portugal's first social impact bond was launched in February 2015. It funds a pilot program, the Junior Code Academy, to deliver computer programming classes to 65 students in years 3 and 4 in three Lisbon public schools. The classes aim to improve school performance, logical thinking and problem solving of participating students.

Calouste Gulbenkian Foundation provided €120,000 upfront for the 30 week program in 2015 and will be reimbursed by Lisbon Municipality if it achieves the intended results. The program will be independently evaluated by Nova School of Business and Economics.

South Australia

Following a discussion paper and capacity building workshops in 2014, the South Australian Government called for expressions of interest (EOI) in social impact investment to:

  • prevent and reduce hospital presentations and admissions for older people from residential aged care facilities
  • improve outcomes for people experiencing homelessness
  • help long stay older patients in public hospitals find more appropriate accommodation
  • prevent and reduce hospital admissions for people with borderline personality disorder
  • reduce the number of children and young people entering out-of-home care
  • reduce recidivism.

The EOI closed on 20 February 2015. As at 1 June 2015, responses are being evaluated.

The Netherlands

The first bond in the Netherlands was launched in March 2014 to tackle youth unemployment in Rotterdam. The Dutch bank, ABN AMRO, and independent civil investor, Start Foundation, invested €680,000 in Buzinezzclub to work with 80 young people each year. Research shows that young people who participate in the Buzinezzclub program spend an average of 211 fewer days on unemployment benefits. The Municipality of Rotterdam will pay back investors based on the level of reduced claims for unemployment benefits.

A second bond, announced by the Municipality of Utrecht in April 2015, will provide €700,000 to the Colour Kitchen to deliver hospitality training to help 250 job seekers aged 17-35 years move into employment. Mediated by Society Impact, Rabobank Foundation and Start Foundation invested in the bond and the Municipality will pay them back based on the number of diplomas achieved, the flow of work and maintaining work.

United Kingdom

Peterborough Prison is the site of the world's first social benefit bond, or 'social impact bond' (SIB) as it's known in the UK. The bond raised £5 million for a pilot program to reduce re-offending of prisoners with short sentences leaving Peterborough. Lessons learned from implementing the pilot are explored in Phase 1 and Phase 2 reports from a process evaluation.

Interim results released in August 2014 showed an 8.4% reduction in re-convictions for the first group of 1,000 prisoners compared to the national average. The result did not trigger a payment to investors, but showed the bond should deliver outcome payments in 2016.

However, the Ministry of Justice announced in April 2014 that the bond would close early in June 2015 because it wouldn't be compatible with intended reforms to national probation services.

Another 28 SIBs have been commissioned across the UK:

  • 10 bonds to support disadvantaged young people with education, training and employment, as part of the £30 million Department for Work and Pensions Innovation Fund. Early implementation findings and total starts and outcome statistics to March 2014 are available.
  • 7 bonds to help homeless young people move into sustainable accommodation, employment, education and training, as part of the £15 million Fair Chance Fund. At least three of these have secured finance from Bridges Ventures and others, and commenced operations. Others remain in development.
  • 4 bonds to support up to disadvantaged young people to improve educational employment outcomes, as part of the £16 million Youth Engagement Fund. Providers have been selected and SIBs are in the design phase.
  • Children Support Services SIB, providing multi-systemic therapy to young people at risk of entering care and their families. It was commissioned by Essex County Council, the first local authority to do so in the UK (implemented).
  • Reducing rough sleeping in London, commissioned by the Greater London Authority and funded by the Department for Communities and Local Government. The first and second interim reports of a qualitative evaluation are now available (implemented).
  • It's All About Me adoption SIB to help children in the care of local authorities find permanent homes with therapeutically trained adoptive families. It is the first provider-led bond in the UK developed and delivered by 18 voluntary adoption agencies nationwide (implemented).
  • Multi-dimensional Treatment Foster Care SIB, commissioned by Manchester City Council, to deliver therapeutic services to young people with emotional and behavioural difficulties to live in a foster family home rather than a residential care home (implemented).
  • Birmingham Residential Migration SIB, commissioned by Birmingham City Council, to provided supported foster placements for young people in residential care (implemented).
  • Well Connected SIB, which aims to reduce loneliness among over 50 year olds to reduce dependency on health and social care services. Operations were expected in begin in early 2015 (status unknown).
  • Ways to Wellness SIB, which funds 4 organisations to deliver a program of 'social prescribing' (or non-medical interventions) to improve self-care among people with long-term health conditions (implemented).

United States

In the US, social benefit bonds are often referred to as 'pay for success' (PFS) bonds (or initiatives).

The push for PFS bonds has come from the White House, with a US$100 million provision in the 2012 budget for up to 7 PFS bonds. PFS has continued to feature in President Obama's later budgets. PFS initiatives are being tracked by the Nonprofit Finance Fund.

In 2002, New York City launched the first US bond to reduce recidivism at Rikers Island. The bond funds the Adolescent Behavioral Learning Experience (ABLE), a cognitive behavioural therapy program for 16-18 year olds detained at the prison. Goldman Sachs invested US$9.6 million in the bond, which is supported by a guarantee of US$7.2 million provided by Bloomberg Philanthropies. MDRC, an intermediary, is overseeing the program delivered by the Osborne Association and Friends of Island Academy. The Vera Institute of Justice is evaluating the program.

Other bonds in the US include:

Development impact bonds (DIBs)

DIBs take the principles of social benefit bonds and apply them to solving challenges in developing countries. Investors provide upfront capital for development programs, which would be repaid by donors or national governments with a return if pre-agreed outcomes are achieved. Read a short briefing note on development impact bonds from the Centre for Global Development.

The first development impact bond was launched in June 2014 to improve educational outcomes in Rajasthan, India. The delivery of services is expected to begin in June 2015.

Green bonds

Green bonds raise capital for environmental projects. The World Bank is leading the charge in this area, having issued US$5.6 billion in bonds since 2008. In April 2014, the World Bank announced a $300 million 5-year, fixed rate green bond in Australia.

Climate Bonds Initiative has been tracking labelled green bonds since 2009.

Tools and resources

Sample documents and templates

A suite of sample standard form documents to help make the drafting of legal documents for transactions more efficient. These documents are based on those used for the social benefit bonds and may not be suitable in all circumstances. They have been developed by King & Wood Mallesons and the NSW Crown Solicitor's Office, in consultation with Trevor Danos AM.

Where indicated, a Creative Commons Licence has been granted in relation to the copyright in a document. The terms of this Creative Commons licence are in accordance with the relevant copyright notice specified for that document. Please refer to the relevant document.

Getting started factsheet

A factsheet that:

  • explains the legal arrangements between the parties involved in the NSW social benefit bonds
  • summarises the sample standard form documents that will be made progressively available for use when developing and implementing bonds
  • highlights some key considerations for proponents developing a proposal for a bond.

Joint development phase agreement (sample)

A sample agreement that proponents would make with the NSW Government if their proposal is selected for further development during the request for proposal (RFP) process.

Implementation deed (sample)

A sample agreement that sets out contractual arrangements between the relevant government department and the proponent for providing services and issuing bonds.

Information memorandum (sample outline)

A sample offering document provided to potential investors, which describes the proponent, the proposed services and the terms and conditions of the bonds.

Terms and conditions of the bonds (sample)

A sample document that outlines the terms and conditions of the bonds (to be inserted into the information memorandum)

Deed poll (sample)

A sample agreement that creates the proponent's legal 'promise' to investors to perform its obligations under the bonds.

Purchase agreement (sample)

A sample agreement between the proponent and investors in relation to the issue and sale of bonds.

Trust deed (sample)

A sample document that creates a charitable trust, which can act as a special purpose entity and assume the role of the proponent in each of the above sample documents.

Management deed (sample)

A sample agreement that provides the arrangements for how a special purpose entity is to be managed. This is only relevant for transactions where a special purpose entity created under a trust deed (above) is used.

Services subcontract (drafting guidelines)

Guidelines to assist in drafting a service subcontract, which is an agreement that provides for how the proposed services will be provided by the proponent. Please also refer to the implementation deed (above).

Direct agreement (sample)

A sample agreement that creates direct legal arrangements between the proponent and the relevant department, where the implementation deed is between the department and a special purpose entity.

Security deeds

Sample agreements for instances where the proponent is providing security, if required by the NSW Government and/or investors (not required in all cases):

Introductory and background reading

UK Centre for Social Impact Bonds

UK Cabinet Office

The Centre supports the development of social impact bonds in the UK, with a repository of information and guidance on how to develop them. The toolkit is not directly applicable to NSW (or Australia), but the site clearly explains key concepts and outlines case studies (mostly from the UK).

Introduction to social impact bonds and early intervention

Ann Griffiths and Christian Meinicke, Early Intervention Foundation, April 2014

A report that suggests social benefit bonds have potential to help fund early intervention services. It explains the structures, mechanics, advantages and disadvantages of social benefit bonds. The report also includes a decision tree to help commissioners work out whether a bond is appropriate for their situation and outlines the process to develop them. It includes case studies from the UK, US and Australia.

Technical guides

Social Impact Bond Technical Guide for Service Providers

MaRS Centre for Impact Investment (Canada), November 2013

An in-depth explanation of social impact bonds, which includes a guide for developing them from idea to action.

A Technical Guide to Developing Social Impact Bonds

Social Finance UK, January 2013

This guide clearly outlines each step in the social impact bond development process.

Social Impact Bonds: A guide for state and local governments

Social Impact Bond Technical Assistance Lab (US), June 2013

This publication provides a useful step-by-step guide for state and local governments on the development process for bonds.