Colleges and Institutes Canada (CICan) is pushing the boundaries of social innovation and impact investing by implementing the first social finance project of its kind in Canada for the Government of Canada.
With the goal to generate private investment for a public good, CICan will leverage the principles of social finance through a Social Impact Bond mechanism by raising upfront capital from private investors looking for a social and financial return, or as some are calling ‘double bottom-line investing’.
ESSF: The Social Impact Bond Model
The Essential Skills Social Finance (ESSF) project is a collaborative partnership between the federal government; CICan; College Service Delivery Partners; private investors; and, the Social Research and Development Corporation as an independent assessor.
Investor capital is used to fund four College Service Delivery Providers to raise the essential skill levels of unemployed adult Canadians. The Government of Canada will repay investor capital and any earned return on capital if an independent assessor confirms that essential skills gains have been achieved and objectives have been met.
The objective of the ESSF Pilot is to test the effectiveness of the Social Impact Bond ‘pay-for-performance’ model and to determine the market viability and optimal conditions for a social finance model to improve program and service delivery for Canadians.
- Social Impact Bonds (SIB) originated in the UK in 2010.
- SIB projects bring together the private and public sectors to achieve measurable, positive social impact.
- The ESSF pilot will be structured on a Social Impact Bond (SIB) model, an innovative approach that mobilizes multiple sources of capital to deliver a positive, measurable social outcome and an economic dividend.