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

In 2017, SFI worked with the Economic Clinic of IDC Herzliya to conduct a study on the potential economic benefits of rehabilitating female sex workers. The study found four primary areas where the Israeli economy stands to gain from successful rehabilitation of these women. Tax revenues would increase while expenditures on criminal enforcement, healthcare and welfare would decrease substantially.

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

In 2013, SFI worked with Pareto, a leading consulting firm, to conduct a study on the potential economic benefit from successful integration of Ultra-Orthodox men into the Israeli workforce.

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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Expanding the number of practical engineers and technicians in Israel

In 2016, SFI worked with Beyachad Foundation, to conduct a comprehensive study of the barriers and opportunities that exist in the field of engineering studies, as well as the economic potential of the system and its graduates. The study found that there is a significant shortage of practical engineers in Israel, despite the relatively high wages offered to practical engineers and the great value they generate for the economy - NIS 1.5 -1.9M. The data show that a large part of those who pursue engineering studies come from low socioeconomic backgrounds. For these populations, graduation is a critical stepping stone to a quality career and to social mobility. At the same time, drop-out rates are high. The barriers to changing this situation are rooted in shallow budgets, but also in the fact that technological colleges are funded in a way that does not incentivize them to improve educational outcomes. The study also presents a number of action recommendations for change, which we believe will lead to better social outcomes and economic outcomes.

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Mental health SIB

In late 2019 we initiated a feasibility study to explore the prospects of launching a social impact bond in the field of mental health. The study was made possible thanks to a donation from the estate of Mr. Bruno Landsberg z”l. The aim of the feasibility study is to strengthen community mental health services in order to reduce recurring psychiatric hospitalizations, a phenomena also known as "the revolving door”. Progress on the feasibility study is being made in collaboration with the Ministry of Health, Israeli HMO's, Enosh: The Israeli Mental Health Association, and other experts and organizations active in the field.

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