Social Impact Bonds help turn social services funding into a lottery | National Union of Public and General Employees

Social Impact Bonds help turn social services funding into a lottery

"What the most vulnerable people in our communities need is stable funding for the organizations that support them, not a cynical process intended to creates false hope." — James Clancy, NUPGE National President

Ottawa (20 July 2015) — In addition to providing a new way to privatize social services, Social Impact Bonds are being used to divert people’s attention away from lack of funding.

The pilot programs for Social Impact Bonds introduced by both the Ontario Liberals and federal Conservatives are good examples. Instead of getting the support they need to serve their communities, community agencies are expected to submit proposals for a long, multi-stage evaluation process where only a small number of projects will receive funding.

“The Social Impact Bond pilot program is little better than a lottery," says aid James Clancy, National President of the National Union of Public and General Employees (NUPGE). "What the most vulnerable people in our communities need is stable funding for the organizations that support them, not a cynical process intended to creates false hope."

Odds of success in pilot program lottery low

Only four of the 83 individuals and organizations that submitted proposals through the Ontario Social Impact Bond pilot program were short-listed. Even being short-listed doesn’t guarantee funding. The Ontario government may only support one project.

Similarly, there were over 150 responses to the federal governments call for proposals for services that could be supported using social finance. Only two were selected.

Social Impact Bond pilots programs part of a larger problem

To effectively meet the needs of the people they are trying to help, social service agencies need ongoing core funding that allows them to plan ahead. All too often that’s not available.

Cuts to social services mean governments are instead providing special project or one-time funding. It allows governments that are cutting funding for social services to maintain the illusion they’re doing something, but it does not provide the resources needed to meet the needs of the most vulnerable people in our communities.

Use of Social Impact Bonds and other short-term funding models wastes resources

When community agencies are forced to rely on special project or one-time funding it increases the time and resources needed for grant applications. Social Impact Bonds eat up even more resources as funding from governments also has to pay for the Intermediary Agency overseeing the project and profits for investors. These are resources that are desperately needed for front-line services.

“Instead of wasting money on shell games, it's time for governments to be honest with people and look at how to make sure the revenue is there to fund the services Canadian families need,” said Clancy.  

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 360,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

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