Abu Dhabi is planning to introduce the region’s first Social Impact Bond, a financial tool that raises private investment to support high-impact social programs, under the Authority for Social Contribution – Ma’an.
According to the Ma’an Authority for Social Contribution, the Social Impact Bonds will launch next year and operate on a pay-for-success basis, whereby payment relies on a successful social outcome.
As examples, Ma’an states that Social Impact Bonds have been used to improve foster care in the UK, reduce reoffending rates in prisoners in New York, improve early years education in Utah and reduce homelessness in Australia.
First introduced in the UK, Social Impact Bonds are now used by more than 40 countries worldwide and help to develop an outcome-oriented approach to social challenges, encouraging innovation and growth within the third sector.
Private investors, such as high net worth Individuals or investment funds, will invest in the Social Impact Bonds and the government will pay back the investor – with interest – but only if the outcomes are achieved.
Ma’an will facilitate the Social Impact Bonds and support the contractual arrangements between government departments in Abu Dhabi, social service providers, and third-party investors. It will also be responsible for monitoring the Social Impact Bond and measuring performance.
Ma’an says it is currently looking into 24 different projects with the possibility to be developed into Social Impact Bonds. They will soon announce a series of Memorandums of Understandings (MoUs) with different government and private sector partners to progress these projects.
Her Excellency Salama Al Ameemi, Director General of Ma’an, described Social Impact Bonds as a game-changer for how they think about the delivery of social programs:
“We are proud to be leading the way in the region for introducing this internationally-recognized method of financing and delivering solutions for social challenges. Ma’an will be launching Abu Dhabi’s first Social Impact Bond next year and we are currently working with government and private sector partners to identify potential projects that will be suitable. “It is part of our wider mission to encourage the third sector to flourish in Abu Dhabi and deliver solutions to social challenges in partnership with government, the private sector and civil society.”