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First Cross-Border Social Impact Bond Helps Dutch Unemployed Find German Jobs - First Cross-Border SIB In The World

Date 08/09/2016

On 8 September 2016, the Dutch independent venture philanthropy fund Start Foundation is launching a unique new Social Impact Bond in partnership with Enschede local authority and co-investor ABN AMRO. Unique, because it is the first cross-border SIB in the world.

So-called Social Impact Bonds (SIB) made their appearance a number of years agoA SIB is an experimentalfinancing system in which private funds are used to tackle social issuesThe first SIB in the world was establishedin the UK, where this SIB helped give young former offenders a second chanceThere are now 60 Social Impact Bonds in 15 countries across the worldMost SIBs have been arranged in the US and the UK. The Netherlands currently has eight SIBs. Germany has oneStart Foundation has financed six of the eight Dutch SIBs.

The SIB is aimed at matching jobseekers in Enschede with German employers. Via this SIB, Enschede local authority, Start Foundation, ABN AMRO and BOAS Werkt aim to provide intensive support to 138 jobseekers in finding available jobs across the borderThis cross-border partnership represents a world first for both countries. Jos Verhoeven, Director of social investorStart Foundation (Eindhoven, the Netherlands): “We are literally expanding the horizons of the labour market as well as theSIB instrumentWe are creating employment opportunities in Germany for the long-term unemployed from the Netherlands with this cross-border SIB.

Ample employment opportunities across the border

The unemployment rate in Enschede is 8.5%[1]There are ample employment opportunities in the German North Rhine-Westphalia region: the rate of unemployment there is below 3%The number of unfilled vacancies is expected to rise in the coming yearsLarge groups of German employees will reach pensionable age in the not too distant futureJobseekers inEnschede still appear to find it difficult to access the German labour market. The local authority of EnschedeStart Foundation, ABN AMRO and BOAS Werkt are addressing this social issue by means of a SIBThe SIB is aimed at the 7,000 households in Enschede that currently receive unemployment benefit.

 

Social Impact Bond, a social investment
A SIB is a new way of collaboration between the government, private investors and agencies to tackle social projects. StartFoundation and the ABN AMRO Social Impact Fund are providing the pre-financing for BOAS Werkt: 1.1 million Euros.Social entrepreneur BOAS Werkt is financing 5% itself, thus reinforcing its commitmentBOAS Werkt will use these funds to help at least 138 jobseekers from Enschede find employment in Germany over a period of 2.5 yearsIf the strategy issuccessful, the jobseekers will find permanent employment with German employersThe local authority will then save on unemployment benefitsThese savings will enable the local authority of Enschede to repay investors. The financial risk of this programme is borne primarily by the investors, not the local authorityKennispunt Twente will measure the results.

BOAS Werkt’s strategy
Job seekers participating in the programme will first attend four weeks of training with Kreishandwerkerschaft Steinfurt-Warendorfone of BOAS Werkt’s German partners that offers training in building, metalwork, plumbing and weldingThe focus is on general professional expertise, health and safety training, the German language and culture, differences between German and Dutch working culture, and a visit to a German employerThat is followed by a practical apprenticeship and,subject to mutual agreement, an employment contract of at least six months with the German employer. All this will take place under the guidance of BOAS Werkt.

 

Participating parties comment on working together on the SIB:

Patrick Welman, Councillor for Economy and Employment
Enschede local authority:
This SIB is a creative way of tackling this social issue and that is in keeping with the innovative character of EnschedeWe want to offer our jobseeking residents optimal employment opportunities across the border.”

Martin Postma, BOAS Werkt:
We are building bridges with the German employment market.

Jos Verhoeven, Start Foundation:
“Expanding the horizons of the employment marketThat is where we are directing our efforts.”

Gerrit Zalm, ABN AMRO:

“After three local SIBs and a national SIB, we are now financing the first cross-border Social Impact Bond. We believe thatachieving social and financial returns is a very appealing combination, which we will continue to support.”

 

Start Foundation is an independent venture philanthropy fund that creates jobs for people who are unable to find employment independentlyWe also aim to remove the obstacles they encounter in the labour marketWe finance existing initiatives and also regularly take the lead in initiatives to make the labour market accessible to our target groups. The Start Foundationboard of directors comprisesFemke Halsema (former Member of Parliament), Han Noten (former trade union official),Annemarie van Gaal (entrepreneur and TV personality), and Alex Mulder (entrepreneur and investor).