Nationwide SIB invests in life on the outside

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Social Impact Bond puzzle with several logos

Earlier this year, I visited the Lelystad prison, which is completely isolated from the outside world by its high walls, gates and bars. For someone like me who’s never served time, it’s hard to imagine what it’s like to live locked away behind bars here. Prison life has its own norms and procedures, and every minute of an inmate’s daily routine is controlled.

Every year thousands of former prison inmates face the challenge of rebuilding their lives on the outside. Ruben Koekoek Ruben Koekoek Manager Social Impact Bonds

It’s a world away from life on the outside, a fact with which nearly every convict is confronted upon release (only a very small number of inmates serve life sentences). Just imagine – the gates swing open, and you’re released back into the world with nothing but one or two personal belongings.

It’s a crucial moment both for the former inmate and for society as a whole. Ex-convicts often have no job, no home address and few social contacts. The question is, who is there to support them? Are they people who even actually want the best for them, who will support them in getting their life back on track and earning an honest living? Or will they fall back on their old contacts in the criminal world?

Free, once and for all

Every year thousands of former prison inmates face the challenge of rebuilding their lives on the outside. Those who fail to reintegrate successfully have a higher risk of reoffending. Ex-prisoners also have relatively high benefit claims. If we could avoid all this, not only would we be saving a lot of public money, but we’d also be creating a much safer society for everyone.

Dutch municipalities and the Ministry of Security and Justice are already active in this area through social rehabilitation initiatives and by subsidising civil society organisations. But now, ex-offenders can receive support through a programme funded by means of a social impact bond (SIB). It’s also the very first time in the Netherlands that an SIB has been mobilised at the national level.

SIBs: investing in others

A social impact bond (SIB) is a contract with the public sector in which private investors pay to solve a social problem. Whether investors recover their money and make a profit depends on the success of the project. At the moment, five SIBs are active in the Netherlands, three of which ABN AMRO has funded.

First nationwide SIB helps prisoners into work

Funding this particular SIB are Start Foundation, the Oranje Fonds and the ABN AMRO Social Impact Fund, who together have raised EUR 1.2 million. This money is being used to initiate a guidance programme called Workwise Direct serving 150 ex-offenders. Participants are informed about the programme while still in prison and are given help in finding and holding on to a job after their release. This ensures they can build a solid foundation for a new life that doesn’t involve crime.

Ex-offenders are given support in many other areas, too, such as debt counselling and their accommodation search. They can also request practical guidance from volunteers, or “buddies”. The project is being implemented by Foundation 180, Exodus and USG Restart – all organisations with experience in rehabilitating ex-prisoners.

We will be following the ex-offenders over a two-year period, comparing their progress with a control group who aren’t enrolled on the programme. Our working hypothesis is that the savings generated by the programme will exceed the costs of the project. So if the state does end up spending less money on benefits and the cost of crime, investors will be paid a maximum annual return of ten per cent. If the initiative proves unsuccessful, the government doesn’t pay out.

It’s important to understand that the programme doesn’t pamper participants. But they are at least given the option to choose a different path and are encouraged to participate fully once again in society. At the end of the day, though, it’s all down to them.

Minimal risk, everyone wins

The main advantage for the Ministry of Security and Justice is that it bears no risk in this scheme. And it only has to pay out if cost savings are actually made. One condition of the collaboration is that the effectiveness of the initiative must be measured very carefully. The agreements made between investors, administrators and the ministry on results are airtight. Panteia, an independent assessor, will be issuing quarterly reports on the ex-prisoners’ progress. If the programme proves to be unsuccessful, there’s always the option to make course corrections and try to determine how we can support ex-prisoners more effectively in the future.

We sincerely hope this unique collaboration between the various partners and finely tuned progress assessment tools will lead to ever-better programmes that really make a difference. We at ABN AMRO are proud to make a contribution to tackling social challenges!

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