NSW has long been a leader in finding new methods of funding positive impact projects. The Office of Social Impact Investment (OSII) released its first social impact bonds in 2013, and now, in 2022, the state government office has made an update with the Social Impact Investment Policy 2.0.
The updated policy looks to the future, but it also reflects on the past, and highlights three key lessons learned:
While individual investments have demonstrated the benefits of the SII model, they remain highly bespoke, and are not always suitable for programs at different stages of maturity
Capability within government and the sector has progressed but needs to grow further
There is untapped opportunity to grow our impact beyond individual SII transactions.
Since getting started, OSII has made nine investments, aiming to “address major social challenges and empower the people of NSW to live better lives”.
The focus was always on ‘outcomes’, ensuring there was genuine impact, beyond just delivering a program of work. To build on success, and move the sector forward, there was a focus on ‘innovation’. And to keep the program in line with broader state priorities the team looked to ‘prevention’ and ‘partnerships’.
It’s refreshing to see a government department leading the way on a market-based mechanism to drive measurable outcomes. The broader, and very commercial, world of impact investing is growing and adapting at a rapid pace, and so it’s timely that OSII should update its policy.
On a Federal level, we saw efforts to examine the needs of the sector through the launch of the Social Impact Taskforce. While the final recommendations of that work are yet to be released, ut OSII is well-positioned to help grow the networks and build capacity in the sector at a more local level.
And as part of the latest state budget, the NSW government has committed $30 million NSW Social Impact Outcomes Fund (SIOF). It will see the NSW Government partnering with multiple social impact providers, and social enterprises, to deliver high impact programs.
The fund has two initial focus areas:
- Advancing the social and economic wellbeing of women facing disadvantage
- Improving educational and job readiness outcomes for Indigenous youth, with a particular focus on girls.
The OSSI has huge potential to be a central axis for best-practice frameworks and knowledge sharing. The lessons learned can not only help to grow the broader investment eco-system, but models of impact measurement and methods to diversify funding streams, could also be adopted in other government departments, boosting the social impact of the NSW government as a whole.