Tuesday, December 20, 2011

Charitable bonds explained

Excellent article by Mr Cheng well worth a read

By Paul Cheng
Head of CAF Venturesome, Charities Aid Foundation
The economic situation is getting tougher for all of us - and charities are no exception.
Central and local government funding for charitable organisations is being cut back as a result of the drive to reduce the deficit. Donations from members of the public are also coming under increasing pressure.
At exactly the same time that some traditional sources of funding are drying up, more and more people are looking to charities to provide desperately needed support and services.
It is because charities are determined to meet this need that many are increasingly looking for new and innovative ways to raise funds.
One idea that is increasingly being looked at is the issuing of charitable bonds which provide a form of long-term debt to expand their work.
How the bonds work
A charity or social enterprise may be able to issue bonds if it has a viable underlying source of revenue with which to repay the bondholders. These may include a chain of charity shops, payments by result for the delivery of a public service, or a long track record in raising funds from a large donor base.
As this form of finance is still emerging in the social sector, there are various types of bonds in existence.
The bond issued by Allia, for example, comprises an innovative investment - suitable for retail investors - to the housing association Places for People, which repays the loan with interest and additionally provides a grant to a charity. This bond allows individuals to invest as little as £100 per bond.
Another organisation, Investing For Good, arranges charity bonds and is currently assisting Scope, the disability charity, to become one of the first UK charities to enter the capital markets.
It is piloting a £20m bond programme operating similarly to corporate bond products and it is hoped that the programme will allow Scope to expand its income generating activities, such as its network of charity shops which generate long-term sustainable sources of income for its work with disabled people.
Triodos Bank is assisting the community interest company Bristol Together plan a bond issue worth £1.6m. The first £600,000 was bought by a charitable foundation and the second tranche of £1m will be sold to private individuals to attract Community Investment Tax Relief, which allows investors to reduce their tax bills by 5% a year for five years.
The guarantees offered to investors with charitable bonds vary, but are primarily based on the track record of the underlying investment, so it is important to understand this in order to gauge the level of investment risk.
Currently, with the exception of the Allia/Places for People bond, investment in charitable bonds is largely limited to charitable trusts and wealthy philanthropic investors.
It is hoped that in the future there will be a growing number of charitable bond products available with well-established track records, which will allow more widespread investment from the general public. This could be invested directly or through special investment products like pension funds.
One particularly interesting type of charitable bond is the Social Impact Bond (SIB) pioneered by Social Finance.
This contract is where the public sector pays the private sector to secure a substantial improvement in the way of life for a specific group, in order to reduce the public sector's costs in the long-run.
While the contract is ordinarily made with the private sector, the organisations that deliver the services on the ground are often charities or social enterprises.
Unlike traditional bonds, SIBs do not have a fixed rate of return as financial return depends on the achievement of specific social outcomes set at the start of the bond issue. The higher the social impact, the higher the return earned by the private sector.
Under a SIB, the charity sector organisation bears no financial risk as the repayment is commonly between the public and private sector. The public sector pays if, and only if, the intervention is successful.
One of the first SIBs was launched in 2010 by the St Giles Trust, a charity providing access to housing, training and jobs for ex-offenders.
This SIB has been designed to reduce reoffending among male prisoners leaving Peterborough prison who have served a sentence of less than 12 months. During the scheme, intensive support will be provided to 3,000 short-term prisoners over a six-year period, both inside prison and after release.
If this initiative reduces reoffending by 7.5%, or more, investors will receive a share of the long-term savings to the government.
If the SIB delivers a drop in reoffending beyond this threshold, investors will receive more money for the greater the success, up to a maximum of 13%.
However, if reoffending is not reduced by at least 7.5%, the investors will receive no recompense at all.
Charities have a long track record of innovation and charitable bonds are a sign of this.
Hopefully, they will go some way to plugging the gap left by the decline in some traditional sources of funding. At the same time they could provide great opportunities for people wanting to invest their money for a return, while helping to make a real difference at the same time.

Saturday, December 10, 2011

The Green Benches: 10 reasons why Cameron will gain politically from ...

The Green Benches: 10 reasons why Cameron will gain politically from ...: David Cameron by vetoing the a prospective EU treaty last night has taken one step closer to winning the General Election of 2015 for lots o...

Friday, December 9, 2011

Abortion 'does not raise' mental health risk

A great article by Jane Dreaper well worth a read

Abortion 'does not raise' mental health risk
By Jane Dreaper
Health correspondent, BBC News

Abortion does not raise the risk of a woman suffering mental health problems, a major review by experts concludes.

Data from 44 studies showed women with an unwanted pregnancy have a higher incidence of mental health problems in general.

This is not affected by whether or not they have an abortion or give birth.

But anti-abortion campaigners said the review sought to "minimise" the psychological effect of terminating a pregnancy.

Experts from the National Collaborating Centre for Mental Health (NCCMH) used the same research methods they use to assess evidence on other mental health issues for NICE.

The work - funded by the Department of Health - came after concerns that abortion may adversely affect a woman's mental health.

Usually, a woman's risk of suffering common disorders such as anxiety or depression would be around 11-12%.

But the researchers said this rate was around three times higher in women with unwanted pregnancies.
'Equal risks'

The director of NCCMH, Prof Tim Kendall, said: "It could be that these women have a mental health problem before the pregnancy.

"On the other hand, it could be the unwanted pregnancy that's causing the problem.

"Or both explanations could be true. We can't be absolutely sure from the studies whether that's the case - but common sense would say it's quite likely to be both.

"The evidence shows though that whether these women have abortions - or go on to give birth - their risk of having mental health problems will not increase.

"They carry roughly equal risks.

"We believe this is the most comprehensive and detailed review of the mental health outcomes of abortion to date worldwide."

Prof Kendall said many previous studies had failed to adequately control for instances when women previously had mental health problems.

After a project which involved a three-month consultation, the researchers believe it would not "be fruitful" to carry out further studies into how pregnancies are resolved.

They say future work should concentrate on the mental health needs associated with an unwanted pregnancy.
Support need

Dr Roch Cantwell, a consultant perinatal psychiatrist who chaired the steering group, said the review was called for in 2008.

He said: "At that time, the Royal College of Obstetricians and Gynaecologists (RCOG) issued a position statement saying the evidence on abortion and mental health was imperfect and conflicting.

"We all recognise abortion is a very sensitive and emotive topic. Our aim was not to debate the moral and ethical issues, but to focus on the available scientific evidence."

The scope of the review excluded reactions such as guilt, shame and regret - although these were considered important - and also assessments of mental state within 90 days of an abortion.

This was because the research was not about "transient reactions to a stressful event".

Sophie Corlett, director of external relations at the mental health charity Mind, said: "It is important that medical professionals are given the correct information to provide support for all women, but particularly those with a pre-existing history of mental health problems.

"This study makes it absolutely clear that this group is at the greatest risk of developing post-pregnancy mental health problems and should be given extra support in light of this."

Dr Kate Guthrie, speaking for RCOG, said: "Abortion, including aftercare, is an essential part of women's healthcare services, alongside access to contraception and family planning information."
'False belief'

However, a spokeswoman for the ProLife Alliance said: "Once again the politics of abortion blinds those who should be rigorously objective in assessing epidemiological evidence.

"This is a pick-and-mix report trying to minimise the psychological effects of termination of pregnancy in a way which does our so-called medical experts little credit."

And Dr Peter Saunders, chief executive of the Christian Medical Fellowship, said: "This new review shows that abortion does not improve mental health outcomes for women with unplanned pregnancies, despite 98% of the 200,000 abortions being carried out in this country each year on mental health grounds.

"This means that when doctors authorise abortions in order to protect a woman's mental health they are doing so on the basis of a false belief not supported by the medical evidence.

"In other words the vast majority of abortions in this country are technically illegal."

Public Health Minister Anne Milton said: "We are pleased to see the conclusions of this important review.

"The findings will be one of the many sources of information that we will use to inform our sexual health document that will be published next year.

"What is clear is that having an unwanted pregnancy has implications for people's mental health and wellbeing."