12 November 2013
2 min read

We have found an exciting and innovative opportunity to generate above market returns while providing funding to a valuable social service that assists children at risk of requiring State care.

In line with our Ethical Charter, we are constantly looking for positive ways to provide a good return on our investments whilst being able to contribute positively to our society and as a result we have decided to invest in social benefit bonds.

What are social benefit bonds?

A social benefit bond (SBB) is a financial system whereby returns are directly based on the achievement of agreed social outcomes, in this case the performance of The Benevolent Society.

We are attracted to the SSB program because it funds a social good in the community while offering capital protection and above market returns.

Under a SBB, investors fund the delivery of services targeted at improving a particular social outcome. Ultimately, this should reduce the need for government spending on acute services such as child care.

For us, this bond represented an innovative approach to funding community support whilst also providing financial gain for our customers which is what we seek to achieve as an organisation.

Investing for our community’s future with The Benevolent Society

The Benevolent Society is Australia’s first charity. They’re a not-for-profit and non-religious organisation and they’ve helped people, families and communities achieve positive change for over 200 years.

Our investment will help fund The Resilient Families preservation service, which focuses on reducing the number of family breakdowns and children placed in the foster care system in New South Wales. It will seek to support up to 400 families over the five-year term of the bond.

We saw this as an excellent way to participate with both the private and public sectors to utilise different forms of preventative programs and assist children identified as being at risk of requiring State care.

The success of SSBs in other parts of the world showed us that this type of partnership, under the supervision of a government body, was worthwhile and has the potential to turn into a well-established financial market.

The financial benefits

Australian Ethical’s investment is capital protected and has the potential for up to a 10 per cent return, well above equivalent NSW Government bond rates. Returns are paid from an ‘outcome payment’ made by the NSW Government.

Our Chief Investment Officer David Macri was keen to assist this development and provide our expertise and knowledge in the area in order to progress what we consider to be a worthy cause for the benefit of not only our community but also for investors.

Sound interesting?

If you’d like to know more about how you can invest your money in pioneering community support schemes such as these read more or join now.