The ‘Wall Streetification’ of Social Services?

Kyrn Stevens reviews the world’s first film on Social Impact Bonds.

The “Wall Streetification” of public services is how David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives, describes the advent of Social Impact Bonds (SIBs).

He’s speaking in a trailer for the feature-length documentary The Invisible Heart, which looks at the pros and cons of what the producers describe as “when capitalism and charity intersect through SIBs”. 

Filmed in Canada, the US, and UK over three years, the feature-length documentary follows the unlikely personalities banding together around this new financial market.

The film takes its name from the term “the invisible hand” coined by Scottish philosopher and economist Adam Smith in the 18th Century to describe the unintended social and economic benefits of the interaction of individuals in markets.

The film takes a hard look at SIB’s promise to solve society’s most complex and intractable problems.

The 80-minute documentary follows SIB inventor and promoter Sir Ronald Cohen as he travels the world pitching to politicians and investors against the backdrop of a growing SIB market.

The film captures the viewer from the outset, starting dramatically with a tightly edited sequence of drone vision of big cities, murals and streetscapes with an ominous voice announcing that “we’ve been searching for many years now for the way to bring about a revolution… we need the revolution in the way that we tackle social issues.”

The film takes us on an engaging journey from the skyscrapers of venture capital and merchant banking, to the streets of the homeless.

SIBs involve governments repaying investors from money saved by achieving predetermined social outcomes and there are now an estimated 108 globally, with eight around Australia and another two under development.

A venture capitalist turned impact investor, Cohen believes finance is poised to become a powerful democratising force in the 21st Century.

The film examines SIBs from design to implementation, through the eyes of venture capitalists, philanthropists, labour leaders, economists, social workers and end users, questioning the impact of profit incentives on the delivery of social services.

It tracks the birth of this new financial market, examines SIBs in Canada and the US from design to implementation, and looks at what happens when capitalism and charity intersect – reviewing both pros and cons.

SIB proponents involved with the film say they improve effectiveness and efficiency of social programs, strengthen relationship between public and private sectors, fund politically unattractive initiatives and enable service providers to scale-up.

They also say SIBs service otherwise unserved populations and improve impact measurement.

The critics say social problems do not lend themselves to the tight metrics required by SIBs, that the “bonds” have significant administrative implications  and aren’t good at dealing with root causes of problems that may be better tackled by other policy settings.

They also criticise SIBs for providing overly simplistic approaches to complex problems, use easy metrics that don’t translate to good social outcomes, blur and deny citizenship rights and allow capital to unduly influence program outcomes, and commercialise social services.

The Invisible Heart is a beautifully and sensitively crafted film with superb cinematography, excellent editing and the use of animations that all bring to life what could otherwise be a dry subject matter.

The film is also rich with humanity as it tells two heart-rending stories.

One is Reginald, a shy young African American boy with speech difficulties, whose brother was shot dead and is a beneficiary of a SIB for preschools in underserved neighbourhoods of Chicago.

The other is John, a formerly homeless and drug-addicted man with schizophrenia who is being supported by a SIB for transitional accommodation in Toronto.

The filmmakers’ commitment to making a valuable contribution to the debate around impact investing is evident in the wealth of resources on the film’s website and the latest information regularly posted on their Facebook page and newsletter.

The first round of screenings in Canada has had panel discussions that have also been filmed and made available online.

The production house’s promotional material says that the documentary concludes that “because SIBs are a relatively new financial tool aimed at social impact, evidence of their results remains limited – more evaluation needs to be done”. 

The film is produced, written and directed by award-winning Toronto filmmaker Nadine Pequeneza, who has produced films on incarcerated youth, abused women and foster children, and it premiered in Canada and New Zealand last month.

She is circumspect about SIBs, telling an interview with Pro Bono News at the beginning of the year that her “big hope” when she started filming was to find a more positive experience that focused on solutions.

However, after three-and-a-half years what she was seeing was “not always the kinds of outcomes that people had hoped for”.

Australian dates for the film are yet to be announced. 

About the author: Kyrn Stevens has executive experience across the non-profit, private, and government sectors, and completed an MBA thesis on social investing at Sydney Business School, University of Wollongong. He is a senior corporate affairs and marketing professional who has worked in legal services, for a federal regulatory authority, as well as for Australian Red Cross and in Indigenous health. He is also a non-executive director of the Fairy Meadow Community Bank Branch of Bendigo Bank. Contact him through LinkedIn: www.linkedin.com/in/kyrnstevens/