A Social Impact Bond fully achieves its outcomes: is that success? - MAZE - Decoding Impact

A Social Impact Bond fully achieves its outcomes: is that success?

This is not a story about how success means different things to different people. It is a story of how a project that fully delivered its intended social outcomes might be at risk of not meeting the most important one.

Projeto Família® is implemented by MDV (Movimento Defesa da Vida), a Portuguese non-profit organisation. Their intervention prevents the institutionalization of children and young people at risk, through the development of parental and relational skills and the preparation for self-sufficiency within the family home.

There are several features that distinguish this intervention from others that tackle the same social challenge:

  1. The focus is the family and not just the child. The underlying assumption is that children’s behaviour is often a manifestation of the context they live in. This means that working with the family is essential to improve on what usually are just signs of a more deeply rooted problem, within the household.
  • The intervention takes place inside the family’s home. Rather than having families attend office hours, the case workers ask permission to visit the family’s home. This method allows the case worker to learn the family’s routines. It makes them feel safer and more in control of the setting and allows for a trust-based relationship with the case worker.
  • The case workers only work with two families at a time and are available 24/7. During the intensive part of the intervention, which lasts for six weeks, each case worker only works with two families, allowing them to always be available to respond to family needs and requests, as well as act in emergency situations. This is essential to deescalate situations of danger and stress, as well as to reinforce a stronger bond with the family.

In order to learn more about Projeto Família® in Porto see here and to know more about the original methodology being replicated, see here.

Even though MDV had been deploying this intervention for over 25 years, they had yet to try to implement it following all the characteristics of the original methodology. Funding restrictions had often forced them to bend and adopt their approach.

The opportunity to try the original methodology emerged when Portugal Inovação Social (EMPIS) made available a €15 million instrument to pay for outcomes, through social impact bonds. Portugal Inovação Social is a government initiative aimed at promoting social innovation and stimulating the social investment market in Portugal. It leverages on investment from European Union Structural Funds, as part of the Portugal 2020 Partnership Agreement.

In 2017, MAZE structured a Social Impact Bond (SIB) for Projeto Família® together with the Calouste Gulbenkian Foundation and Montepio Bank as investors and EMPIS as the outcome payer, to finance the implementation of this intervention in Porto.

An unusual feature of this SIB is that the outcome payer is not the Social Security Institute, which is the public sector entity Portugal that is responsible for public policy in the thematic area of children and youth at risk. However, the Social Security followed the implementation of the project closely through regular review meetings.

After its full implementation, the SIB reached all its nine outcomes in 2021. According to the outcome-based contract, there were nine cohorts of 20 children each. For the result to be achieved, each cohort needed 60% of the children to remain with their families, for the 9 months following the end of the intensive intervention. This result was assessed by Social Security teams, based on their official records. The overall preservation rate of the project was 91%, with 163 children out of 180, remaining with their families.

Nonetheless, we argue that this SIB is at risk of not achieving its most important outcome.

The fact that 163 children were able to remain with their families is an enormous achievement that cannot be overstated. However, one of the important goals of the consortium of partners behind this SIB was to inform public policy on the thematic area of children and youth at risk. So far, this has not yet been achieved.

Some relevant numbers on the area of children and youth at risk are worth highlighting:

  • A child who is removed from its household is institutionalised, on average for 3,4 years.[1]
  • Each month, this child represents a cost to the government of between €700 and €1.000.[2] This means that by the end of this 3,4 years, the State has spent between €29.000 and €42.000.
  • Avoiding an institutionalisation using Projeto Família® costs under €2.700, per successful case, based on the 91% success rate of the Social Impact Bond. Even if we assumed that merely 10% of these institutionalizations prevented were attributable to the intervention, the cost for each of these success cases would be €27.000. This would still represent savings for the public sector in the short term and positive implications for the children and families involved in the long-term.

The social problem is staggering, the numbers are clear and there seems to be a proven intervention that delivers effective results. However, there are several challenges in the process of replicating the intervention of Projeto Família® at scale.

  1. There is a lack of resources within coordination teams from Social Security, as well as other relevant structures, that are working to signal children and youth at risk[3]. This means that even in places where there are responses on the ground that are equipped to address this problem, it is difficult for Social Security teams to properly leverage on this network of support.
  • It is fundamental to incorporate more flexibility into existing cooperation agreements[4] (that govern the contracting between the State and social organisations who provide social services) to accommodate innovative responses, when they show a proven track record of success.
  • It is urgent to strengthen specialized responses for family support. For example, the district of Beja has over 40.000 minors but only has one organisation equipped with a cooperation agreement to support children and youth at risk.[5]

A Social Impact Bond defines outcomes to measure its success. But its wider goal is to test out a solution that can improve the current social protection system in a specific social area, such as children and youth at risk. The upcoming months will be crucial in determining whether we can call this project a success.

From our perspective, success can only be fully achieved if we find a way to incorporate the learnings from the past four years in public policy design and investment, leading to a replication at scale of an intervention that delivers outcomes in an effective and predictable way – such as Projeto Família®.

And there are so many others.

[1] Instituto da Segurança Social, I. P. (2018). CASA 2017: Caracterização anual da situação de acolhimento das crianças e jovens. Lisboa, Portugal: Instituto da Segurança Social.

[2] Law Proposal number 1012/XIII/4.ª Procede à alteração do Regime de Execução do Acolhimento Familiar, reforçando o acolhimento familiar, promovendo uma política efectiva de desinstitucionalização de crianças e jovens

[3] EMATs (Equipas Multidisciplinares de Apoio Técnico aos Tribunais), CPCJs (Comissão de Protecção de Crianças e Jovens) and courthouses

[4] Cooperation Agreements are a set of responses deployed by social security in partnership with private organizations. CAFAPs are a cooperation agreement aiming to work with families of children and youth at risk

[5] Pordata, 2021

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