The federal government is moving forward with plans to let investors profit from social needs and community challenges.
The Liberal government is spending $50 million to open organizations up to for-profit investment in vital services and projects. It’s part of the plan to unroll $755 million in seed funding for “social financing” to charities, non-profit groups and other organizations serving a social purpose.
Social impact bonds are one example of social financing. Consultants, investors and some governments are pushing SIBs as a new way to deliver social services.
CUPE has warned that SIBs are like public-private partnerships, including the secrecy that surrounds them. But the Liberals have not addressed any of our concerns.
We shared our concerns with the government in formal consultations, highlighting the harm caused by decades of underfunding.
Our submission made four key recommendations, including a call to strengthen, not privatize, social services by ensuring long-term, sustainable funding to public and not-for-profit organizations.
Many organizations are doing critical work addressing systemic inequities, in spite of chronic underfunding and weak government support.
Secret investors wrong way to deliver social services
Social impact bonds allow investors to profit from vital social services. At the same time, social impact bonds conceal key details about who is profiting from the service, and under what terms and conditions they are doing so.
In some cases, that information can be dug up through access to information requests. But those take time and money – and there’s no guarantee of full transparency.
The Government of Manitoba is now testing the limits of transparency, with a new social impact bond that allows some investors to remain anonymous.
This must not become the standard for how we deliver much-needed services in our communities. Accountability and transparency are at the heart of strong social services.
It’s time to stop this dangerous experiment that takes much-needed services and turns them into investment opportunities.
CUPE calls on governments to reject for-profit social impact bonds and instead properly and directly fund the social services and programs we need to advance social and economic justice, and reconciliation, in our communities and our country.