SIB Feasibility Studies
Israel faces various social challenges that can be tackled using Social Impact Bonds, also known as the Pay-for-Success model. In examining whether a SIB is a suitable mechanism for financing effective intervention programs, it is essential to assess the scalability of the intervention model.
A comprehensive feasibility study thoroughly examines evidence surrounding social interventions around the world to identify root causes, analyze socioeconomic effects and quantify economic implications for stakeholders.
Stages of a SIB Feasibility Study:
Defining the Social Need
At this stage, we analyze the social issue, research its root causes and identify the barriers to resolving it. Insights are gathered from colleagues, literature, and data analyses in order to effectively characterize at-risk populations and outline their needs.
Selecting an Intervention Model
After a diligent review of existing intervention programs, past and current, SFI identifies the most effective components of programs targeting comparable populations. This stage also requires a thorough audit of an organization with expertise in solving the social need in order to verify capacity and review projected costs of the program components.
Defining Desired Outcomes
In collaboration with stakeholders, outcome funders, and industry experts, the desired outcomes of the intervention program are specified. This is an essential component of evidence-based intervention programs, where the valuation of positive outcomes drives the viability of the investment. Subsequently, a method for measuring these outcomes will be selected, utilizing indicators and historical benchmarks.
Economic Modeling
At this stage, the economic implications of the social phenomenon in question will be analyzed in depth. This process includes outlining current costs to stakeholders, potential savings as a result of the intervention, and identification of primary funders.
Financial Modeling
Finally, an initial financial model is developed to draw together all relevant information and project the financial aspects of the proposed intervention. This model includes an outline of program costs, required investment, cash flows and anticipated revenues. This tool enables all parties to examine the feasibility of a Social Impact Bond based on potential success rates and the corresponding revenues.
CASE STUDIES
Rehabilitating Female Sex Workers
This study concluded that the total economic benefit would amount to nearly NIS 30,000 annually, for each woman who exits the cycle of prostitution and is successfully integrated into the Israeli workforce. This study has prompted discussions with the Ministries of Welfare and Finance to launch a Social Impact Bond that will reduce prostitution in Israel. Currently, negotiations are ongoing regarding measurement of outcomes and outcome payments.
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Employing Ultra-Orthodox Men
The study found three primary areas where the Israeli economy stands to gain from successful integration of these men. These would be a reduction in pension payments, an increase in tax revenue and a boost to GDP.
The study concluded that these benefits would total nearly NIS 100,000 annually, for each Ultra-Orthodox man that is successfully employed.
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