Andrew Studd, a partner in the Charity Team at Russell-Cooke, has been advising a number of leading grant making charities, in particular the Tudor Trust, on their investment into a newly launched social impact bond.
Social investment is increasingly used by grant making charities to seek a social and financial return from their investments allowing them to use their funds several times over.
The social impact bond, widely commented on in the press, has been launched by Social Finance and is designed to help finance social programmes that in tight financial times, governments find it difficult to finance. The first bond is intended to reduce reoffending amongst prisoners in Peterborough Prison. If successful it will give an economic and social return to investors. In difficult economic times these sorts of programmes come under pressure but there is a clear cost benefit to the taxpayer by reducing reoffending rates. The Peterborough bond is backed by The Ministry of Justice and the Big Lottery Fund. Investors in the bond will receive a financial return depending on the success of the project in reducing reoffending amongst short term prisoners at Peterborough.