Social Impact Bond Emmen: a new innovative entrepreneurial system to get unemployed to a job
Through the OSI process of OSIRIS in Drenthe it became clear that the current system to help long-term unemployed is such that the social limitations of their clients forms the business case for a wide range of services where entrepreneurs or organizations earns money on their offers and not on the results. This system costs society a lot of money and returns (unemployed gets employed) are low.
Social Impact Bond found an innovative way to improve this process. Long-term unemployment often facing multiple problems and are, therefore, dealing with many different organizations (healthcare, debt counseling, assisted living etc.).
By involving an entrepreneur (Toolbox) whom is responsible for the results. They look at what people can do and what they would like to do. Then they stimulate and facilitate. The entrepreneurial environment in this business with start-ups, education, facilities (woodwork, metal, electronic, ICT and Media) is perfect for this kind of approach. The result is that unemployed become independent of social support. This means considerable savings for the municipality. The entrepreneur pays all costs for rent, facilities and support up front. The municipality pays only a certain amount after success. This agreement is set down in a contract – the Social Impact Bond. Per successful individual the municipality saves between 50,000 and 80,000 euros a year.

Resources needed

There are no extra costs for the municipality: only with results the entrepreneur gets paid. The entrepreneur pays all costs for rent, facilities and support up front.

Evidence of success

In the small scaled experiment e few persons were led to independency.
Up-scaling is foreseen

Difficulties encountered

The biggest challenge was financing through different financial sources within the municipality. Although the innovative approach focus on real results without any risk for the municipality the different departments were not easy to convince to contribute to the payment.

Potential for learning or transfer

Social impact bonds are now rolled out in different municipalities. Not only with unemployed but also with refugees. Still at the base of the entrepreneur takes the risk, the authorities are paying on result.
Project
Main institution
Municipality of Emmen
Location
Drenthe, Netherlands (Nederland)
Start Date
January 2016
End Date
Ongoing

Contact

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