For an introduction to the concepts described in this article, please see this post by Afonso.
In January of 2015, MAZE helped structure and launch the first Social Impact Bond (SIB) in Portugal. This SIB used the investment capital provided by the Calouste Gulbenkian Foundation to finance five semesters of computer programming classes, in three public primary schools in Lisbon. While the outcomes contracted were only partially achieved, this project was a success in the sense that it paved the way for everything that was to come in the social outcome commissioning landscape in Portugal.
Following a successful first try, MAZE would go on to structure and manage the performance of the next three SIBs: Code Academy Bootcamps, Faz-Te Forward, and Projeto Família. Between 2016 and 2021, we supported providers, investors, and public sector partners through the implementation of these three projects. Together, we navigated through the highs and the lows of this financing instrument.
These three SIBs were the first where the outcome payment was contracted through Portugal Social Innovation (PSI), a public initiative which mobilized European funds to promote social innovation and boost the social investment market in Portugal. PSI’s 15M outcome-based payment fund was critical to accelerate the adoptions of SIBs in Portugal, which has since become one of the countries in the world with the most Social Impact Bonds launched.
As we enter 2022 and publish the final reports for Code Academy Bootcamps, Faz-Te Forward, and Projeto Família, we must celebrate the amazing feat that was the achievement of all outcomes contracted under these SIBs:
- Code Academy reskilled 174 unemployed people as software developers, of which over 100 entered the job market as coders within 4 months of completing the Bootcamp.
- Faz-Te Forward delivered its 10-month mentoring, coaching and job readiness program to 150 young NEETs, of which over 40% entered the job market within the agreed timeline, and 20% maintained that job for over six months.
- Projeto Família has helped the families of 180 children at risk develop their parenting and relational skills.163 of these children have been safely preserved within their family home.
2022 will be the year of completion for our fifth SIB. Launched back in 2019, Cuidar de Quem Cuida is a specialized response to the needs of informal caregivers and their mental health. So far, all outcomes assessed have been achieved.
However, reflecting on what has been going well inevitably reminds us of the areas where this instrument is yet to achieve its full potential:
- It is critical that we find a way to reduce the administrative burden that this instrument represents for investors and providers. While outcome payments are conditional on outcomes, they are still anchored around delivery costs and dependent on an exhaustive financial reporting which has no place in an outcomes-based mentality.
- On the other hand, the right public sector bodies must have skin in the game from the structuring to the closing of these contracts. That is the only way to ensure that the outcomes defined are meaningful, that the learnings made inform public policy, and that successful intervention models are given a chance to scale up.
Looking ahead, we will take what we have learned and continue to push the boundaries of the outcomes-based commissioning tools available.
What comes next for MAZE might be a SIB, or something else. It is not about the instrument, but about setting the right incentives, promoting collaboration and innovation, and keeping outcomes at the centre of every conversation. We believe this is the only way to achieve better and more equitable social outcomes for the 10M+ people that live in Portugal. Seven years after we launched our first Social Impact Bond, this continues to be a core goal for MAZE, and a guiding light for our work at the Government Performance team.