A Social Benefit Bond (SBB) is a proposed new financial instrument to encourage social investment.

The model allows private investors to fund programs focused on delivering improved social outcomes.

If these outcomes are delivered, this can generate cost savings to government that can be used to pay back the up-front funding as well as provide a return on that investment.

The NSW Government intends to establish two pilot Social Benefit Bonds in the areas of out-of-home-care and recidivism.

A Request for Proposal (RFP) focused on these areas has been released, with submissions closing on 24 November 2011. The RFP is available at the eTendering [1] website.

Further information on Social Benefit Bonds can be found at the NSW Treasury [2] website.