A new welfare project in which private corporations invest in public works in return for financial support and other rewards if the projects are successful has been completed. The first SIB (Social Impact Bond) project has attracted a sufficient number of private investors to be implemented. It will be the first of its kind in Korea as well as in Asia.
At 3 p.m. on April 25th, the Seoul Metropolitan Government and Pan-Impact Korea held the 1st SIB inauguration ceremony to announce the commencement of the project. In the ceremony, the CEO of Pan-Impact Korea Gwak Je-hun presented the progress of the Seoul SIB project and announced that “the MOU on Cooperation has been finalized between Institutions Participating in the 1st SIB Project.” Institutions include the operating agency (Pan-Impact Korea), the investors (PPL Korea, UBS, MY Social Company), and the executing agency (Daegyo Culture Foundation Consortium).
As SIB injects budgets only when a project yields successful results, it is widely considered to be a mutually beneficial project, allowing public institutions to minimize administrative expense wastage and affording the institutions willing to invest an opportunity to practice social responsibilities in addition to receiving returns on their successful investments.
The first SIB project, which starts in July, is set to help children in child welfare institutions (group homes) in need of social protection return to their families and stand on their own feet through home care and education. In the welfare institutions, 2 guardians and 5-7 children form a household. The education provides appropriate intervention programs to improve the mental health, social skills, and intellectual development of the children for 3 years, with the goal of developing independent, successful citizens.
This project aims to improve their social and intellectual qualities, and its performance indicators are an improvement in independence and a decrease in maladaptive behaviors. The requirements for success are a rise in the results of the TRF (Teacher Report Form) for the children compared to before the education and an improvement in the child’s intelligence indicators to the national standard. If a third assessment institution assesses the project as successful, the SMG will reimburse the private institution’s expenses as well as deliver additional incentives. The payment does not guarantee the principal according to the rate of successful children.
《 SIB System 》
In the first project, ▴PPL Korea (Chairman: Kim Dong-ho), ▴UBS Seoul (CEO: Hong Jun-gi) ▴MY Social Company (CEO: Kim Jeong-tae) invested 1,110 million won in total. Through an assessment of a deliberation committee consisting of experts in child psychology, group homes, and social innovation as well as investors, the Daegyo Culture Foundation Consortium (Chairman: Yeo In-guk) has been selected as the executing agency.
If appropriate programs are provided, leading to the successful development of children with enhanced learning capabilities and social skills, the SMG expects the project will improve the quality of life of neglected children and prevent social expenses that would occur for their lifetime if they were to remain neglected.
In addition, the SMG will expand its application by conducting the second and third SIB projects in a variety of areas, such as assisting youth in crisis to acquire academic degrees and jobs and assisting the homeless and North Korean defectors to integrate successfully into society.
According to Mayor Park Won-soon, “The SIB project is an innovative project that stimulates cooperation of the public and private sectors in order to create change in society and reduce social costs by preventing social problems. The Seoul Metropolitan Government will make efforts to spread the project into different areas, always with the responsibility that comes with conducting the first SIB project in the country.”