Josie Soutar

Josie Soutar

Social Impact Bonds and the implications for small and medium-sized UK charities

This study is concerned with Social Impact Bonds (SIBs) and the implications they have on small to medium-sized charities operating within the UK. SIBs are a new type of outcome-based commissioning to fund the delivery of public services, often through voluntary sector organisations. They aim to utilise finance from capital markets to invest in health and social care, paying out financial returns only when social outcomes have been met. SIBs require at least three parties: the social investor, the public commissioner and the delivery partner, often with an intermediary acting as a fourth party to help develop the complex financial models that SIBs can require.

The UK Government has been keen to promote social investment as a progressive way to fund charity work; with SIBs an innovative solution to the biggest social challenges we face today (Department for Culture, Media and Sport 2017). But little is known about the long-term impact of SIBs on the shape of the voluntary sector. Against the backdrop of austerity, small or medium-sized charities in particular face real challenges of survival. So far, social investment within the voluntary sector has mainly been through large investments. Thus SIB’s, which require high transaction costs in order to develop complex financial models and a large enough scale to generate sufficient financial returns for investors have the potential to be inaccessible and/or inappropriate to the smaller charity, further adding to their fight for survival.

Funded in collaboration with Sheffield Hallam University.


Christopher Dayson (Main supervisor)
Ellen Bennett, Peter Wells (Secondary supervisors)