Am I worried? I don't know that it keeps me up at night.
SIBs, social impact bonds, are an interesting financing tool. They've had a modicum of success in different countries: the Peterborough prison experiment, for one. It has application to certain social problems and not to others.
It's been investigated by the Government of Canada on a pilot basis. They've engaged us and asked us about it. It's not so much that a market mentality or market driver is so much the problem, as what we understand drives the benefit to it.
On one side you have a venture capitalist—credit union, bank, financial institution—willing to take what I would call a very low level of risk in a SIB situation. You have a not-for-profit, usually a not-for-profit organization, that basically ponies up the idea and the hard work and labour behind it, and the government guarantees it. I'm okay with that. I think that can lead to innovative approaches.
The only issue I have is that it doesn't lend itself to complex models because it's all based on the metrics. For example, take recidivism. Recidivism, to me, is inordinately complicated because you don't control the levers to actually gain success in dealing with recidivism.
You could do it on a child and family service model because you know the costing structure exactly. You know what it takes to put a child in care. You know what an intervention would save, and you could figure it out. As I once said famously to a federal deputy minister, “It's not that I don't trust you, but I don't trust you.” I would want to know the metrics too in order to do it.
I have no problem taking risks. One of the things that I think folks should consider in a SIB model, which is only one small slice in the social finance umbrella, is where the return on investment is to the not-for-profit organization, which takes the risk in reputation, energy, and time. If you're going to give 7% back, 10%, whatever the number is, to a financial institution, how about 1% or 2% going to the not-for-profits so they can continue to build in the innovation at the ground level because they have to take the risk?