Private investors in Sweden are working with a local municipality to improve the lives of foster children with a novel financing method.
SOCIAL IMPACT BONDS FOR FOSTER CHILDREN
Sweden’s first social impact bonds have been jointly developed by Norrköping Municipality, Leksell Social Ventures, the Committee on Mental Health of the Swedish Association of Local Authorities and Regions, and the company ‘Health Navigator’. The Social Impact Bonds were developed primarily to improve the situation for children who are in foster care in Norrköping Municipality by enhancing support for these children, including measures to improve their school results. A secondary goal was to develop work on social investments and to test a new model of collaboration between external funders and public entities, such as Norrköping Municipality.
PRIVATE INVESTMENTS TRIGGER SOCIAL OUTCOMES
The basis for the Norrköping model is the internationally tested model for service production through social outcome contracts, so-called ‘Social Impact Bonds’. The very idea behind Sweden's first Social Impact Bond is to encourage private investors to help address some of the Municipality's challenges.
INTERNATIONAL RECOGNITION FOR THE CONCEPT
Since the first Social Impact Bond was launched in 2010, the concept has gained increasing attention. Called the “hottest idea in social service provision” by the New York Times, there are now more than 120 Social Impact Bonds in over twenty countries, with more than EUR 500 million invested capital, tackling social challenges such as the integration of refugees, loneliness amongst elders, youth crime, prevention of diabetes, etc.