Social services are invaluable to the health and well-being of our communities. Governments provide funding directly to social services agencies to help people in the community. Agencies do that in many ways, including improved literacy rates, better health outcomes, and fewer people in prison.
Social service providers often have deep roots in the community. Agencies are staffed by experienced and dedicated workers, and can take a long-term approach to addressing systemic issues like poverty, colonialism, and racism.
This public model is efficient. It ensures services meet changing community needs, and are accountable and responsive. All public dollars go to service delivery.
Unfortunately, governments often decide to underfund social services. This can open the door to privatization. Social impact bonds (SIBs) are a new form of privatization that allow private investors to profit from social services.
In a SIB, private investors provide up-front money for social programs, but expect to make a profit. The investor could be a bank, insurance company, foundation or even a group of for-profit corporations.
The government often hires a private consultant to broker a deal between private investors, government and social service providers. These consultants get paid from money that could otherwise be going directly to social services. The consultant and/or government chooses a non-profit that is most likely to meet short-term targets, rather than longer-term community needs. The targets are negotiated by the consultant, for-profit corporation and government.
Meeting the targets means the private investors make a profit – then the service is provided. The non-profit eventually reports back to the consultant or a hired evaluator to measure its success. Success is determined based on targets that dictate how much investors will profit. If specific targets are met, the government pays back the investor – with a profit. The private consultants also get paid.
This is wrong. Public money that should go directly to providing social services is diverted instead to private profit.
There’s no room for profit in our community social services.