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Calgary non-profit has social impact bond in the works

STORY UPDATED: The province of Alberta provided a response to social impact bonds and it has been added below.

Calgary could soon be home to the province’s first social impact bond, though critics say the finance mechanism’s overall results are dubious.

Dr. Robbie Babins-Wagner, CEO of the Calgary Counselling Centre, said they’d been looking at different ways to finance charities and non-profits for some time, recognizing that with the current world economy, it’s possible traditional funding sources – government or agency grants, philanthropic donations or earned revenue – could decline.

“What I’m concerned about is that the dollars available to governments today, and not only in Alberta, but everywhere in North America, are shrinking,” she said.

“The needs of communities are not shrinking. They’re growing.”

So, her organization is exploring the idea of a social impact bond to help fund some of the mental health work, specifically counselling, for their growing client base.

Babins-Wagner will be a panelist at the upcoming Calgary premier of Canadian director and producer Nadine Pequeneza’s film, The Invisible Heart, the world’s first documentary on Social Impact Bonds.


First initiated in the United Kingdom in 2010, Social Impact Bonds (SIBs) are financing mechanisms that allow private funding (though individual / corporate investors or philanthropic organizations) of social programs that are paid a return based on program outcomes – typically called payment triggers. Typically, the bond is created around a specific program with specific measurable results. The first was done in Peterborough, UK and dealt with preventing recidivism among the short-term prison population.

That program paid investors in full, at a rate of three per cent annually. Returns vary from one per cent to 25 per cent, usually dependent upon the level of risk an outcome may or may not realize. The return is often paid by government but sometimes by large philanthropic organizations. Proponents say there’s financial benefit to governments by paying returns for early intervention programs that reduce long-term budget impacts.

Here’s a (basic) hypothetical: A non-profit develops a program with specific goals (payment triggers) attached. The program has an overall administrative cost attached to it and investors are sought to front that cost. A return is negotiated based on reaching those goals and should they be achieved, the investors get their principal plus the negotiated rate of return.

Right now there are roughly 108 SIBs in 24 countries.

In 2010, the Canadian Task Force on Social Finance produced a report called Mobilizing Private Capital for Public Good, which outlined potential for tapping into capital markets to fund social programs. According to a piece published by the Canadian Press in April 2018, work on a federal strategy to access these private funds is ongoing.

Still, there are four SIBs already operating in Canada. Two are federal programs – one done in partnership with the Heart and Stroke Foundation focusing on hypertension and another done in conjunction with two colleges (Sask and Ont) to improve essential skills training for unemployed adult Canadians.

Two others are in Saskatchewan, focusing on child and family welfare and early education.

Calgary Counselling Centre may be the fifth in the country and first in Alberta.


Dr. Robbie Babins-Wagner, CEO, Calgary Counselling Centre. DARREN KRAUSE / LIVEWIRE CALGARY

Dr. Babins-Wagner said the Calgary Counselling Centre has been collecting data on patients related to their specific mental health needs since 2004. Each time a client comes in they’re required to complete a 45-question survey that gives a snapshot of a person’s mental health distress. Babins-Wagner called it “mental health vital signs.”

She said having that ongoing patient data has put them in a unique position to have organized their programs and services around positive outcomes. These outcomes are critical in determining payment triggers for social impact bonds.

Calgary Counselling Centre recently completed their social impact bond feasibility study.

They’re set to build the outcome platform in the coming months. Then they’ll go to the potential investors – and payers. That’s where their biggest hurdle could come as governments often backstop the returns for investors.

UPDATE: In an emailed response to LiveWire Calgary, the Alberta government said social impact bonds were considered by the previous government, but they’re not being considered at this time.

But, Pequeneza, who’s been filming documentaries around social issues for the past two decades, said that these largely already proven outcomes, created around long-term studies, have investors salivating at the easy returns.

“That’s not what social impact bonds were supposed to be about. And – the risk adjusted returns that they’re getting – between 8 and 12 per cent – don’t reflect, I believe, the risk that’s being taken,” said Pequeneza.

She said that in her four years of research on SIBs, she’s found that most of the outcomes are based on established, long-term data collection.

“I’m disappointed by the fact that the programs have not been innovative.

“They haven’t really been trying to target innovative programs and on the contrary, investors are more drawn to programs with track record.”


Initially, going into her research, Pequeneza was intrigued by what SIBs had to offer.

“When I heard about social impact bonds I was very encouraged by the idea that this would focus attention on preventative, early intervention programs, which is where the evidence has been saying we need to be investing,” she said.

Her film focuses on two primary SIBs – one in Chicago on early childhood education, and another in Toronto that looks at tackling the city’s chronically homelessness.

Pequeneza said she’s often reflected back on the work being done and the returns paid out to investors and she’s not convinced it’s working.

“At the end of the day, the people really bearing the risk are the people in the program,” she said.

“What does it mean when we’re saying, ‘When you don’t achieve success, you can’t fund programs?’

“When we put all of the responsibility on individuals to change their behaviors and their lives, and we’re not doing anything to deal with the systemic problems, which social impact bonds don’t address, it just seems like the wrong direction.”

She’s not alone in her critique. The National Union of Public and General Employees (NUPGE), who have a voice in the documentary, have no fewer than 14 media releases (most recently Sept. 18, 2018) deriding the use of social impact bonds to fund these programs.

In the film, David MacDonald from the Canadian Centre for Policy Alternatives says it’s “a Dragon’s Den approach to social services.”

Others, including researchers at The London School of Hygiene and Tropical Medicine, say there’s no evidence – yet – that social impact bonds lead to improved outcomes or if the ‘cashable’ government savings are actually there. They looked at nine projects across the UK to reach their conclusion. (158 page report below)

On the flip side, the Johnson Shoyama Graduate School of Public Policy in Saskatchewan, a partnership between the University of Saskatchewan and University of Regina, reviewed the Canadian SIBs and showed some of the positive outcomes – including projected cash savings for the governments. They also take time to dispel some of the myths around social impact bonds.


Dr. Babins-Wagner doesn’t believe the outcomes are always a slam dunk but recognizes this may be the best place to improve the effect of SIBs.

“I don’t think the outcomes are often hard enough, meaning scientific enough, and developing robust outcomes is kind of an art and science of its own. I think that’s the place for innovation,” she said.

She understands that right now SIBs are symptom-driven, meaning they don’t directly address root causes. Babins-Wagner said they could do both.

Pequeneza agrees but doesn’t hold out a great deal of hope that root causes of social distress can be addressed using SIBs. She said private investors with a desire to fund social program would be better off investing in companies that pay living wages, have vacation and sick pay, flex hours and ones that have people with diverse cultures or backgrounds in senior leadership roles.

“All of these things are what get at root causes,” Pequeneza said.

Both are convinced, however, that the pursuit of SIBs and the documentary work are pushing everyone towards finding a longer-term solution for funding social interventions.

In terms of their SIB exploration, Dr. Babins Wagner said they want to contribute to the bigger conversation.

“If we’re just doing it to get a result, then I think we’ve missed the boat,” she said.

“This has to be aligned with our values. And if it’s not aligned with our values and ends up being just another grant, I’m not interested in that.”

She’s hoping the government sees it as an innovative step forward.

Pequeneza’s hope is that her film continues to bring people together to talk candidly about the possibilities.

“The fact we have this spectrum of voices involved in the discussion is a very good sign,” she said.

Babins-Wagner said the ultimate goal is fairly simple.

“I think we need to change the conversation on how we fund charities in Canada.”


The Invisible Heart has its Calgary premier at the Globe Cinema on Oct. 17 from 6:30 to 9:30 p.m. The documentary is 80 minutes long and there’s a panel discussion afterwards. Tickets are through EventBrite.

Joining Dr. Babins-Wagner on the panel are:

Martin Garber Conrad – CEO, Edmonton Community Foundation

James Stauch, MEDes – Director, Institute for Community Prosperity, Mount Royal University

Timothy Wild, MA, MSW, RSW – Member, Calgary Social Workers for Social Justice

Director Nadine Pequeneza will be the panel moderator.