I'll start with the study from Carleton that you mentioned.
I found it interesting because there were three conclusions. One is that the groups weren't interested in social finance instruments per se because of the challenges of understanding them. That is valid. Other countries have set up capability funds. A good example is both the U.K. and the U.S. recognizing that this is a change and that to bring organizations along they would need to be able to provide them with assistance to understand this new market, but also how they can position themselves to function in this new market. The U.K. in particular has set up very generous funds, both through the government and through public foundations, to be able to provide that expertise to charities and not-for-profit organizations.
I think one reason that's important addresses the second and the third points from the study that you cited. It's true that a lot of organizations speak to the fact that short-term contracts are very difficult to manage and the financing that comes with them is not stable. They have to apply on a pretty frequent basis to get access to new grants or new funding. In fact, social finance wants to address that head on. Social finance wants to be able to move away from those short-term contracts. If you recall, in my presentation I said that one advantage is that you can deal in a preventative mould with issues, so you take a much longer perspective.
The first social impact bond that was launched in the U.K., the Peterborough pilot, is a seven-year project. It takes a much longer view. It's moving away from short-term contracts. At the same time, opening it up to other sources of funding it is designed to provide more financial stability for organizations. We know that in the charitable and not-for-profit sector they want to have more stable sources of financing. To apply for grants on an annual basis is very challenging, and you never know if you're going to get one. If you have an investor that's willing to provide you with patient capital to do something over a three-year, five-year, or seven-year horizon, that really helps an organization's business model, because it knows it's going to have multi-year funding as opposed to just annual funding. It's important to be able to get across that message because we hear the same thing from organizations.