Innovative collaboration will use Social Impact Bond to help young people get back on track

Wouter Beke, Flemish Minister for Welfare, Public Health, Family and Poverty Reduction: “Innovation is also a key word in the field of Welfare. A Social Impact Bond enables us to do things in a smart way. We’re looking to find out how we can provide better support to a group of young adults who are going through a difficult time, and help them get their lives back on track. This is an issue for which there are currently no easy solutions. The experience that will be gained here will hopefully be the first step in devising a more effective policy.”

Sabine Bourgeois, Director of the Oranjehuis non-profit organisation, stated: “Our Young Adults team saw an acute need for this project in order to tackle homelessness among young adults. We worked on the project together with the southwest Flanders General Welfare Centre, with whom we’ve had very good cooperation. On the advice of BNP Paribas Fortis we looked into the feasibility of financing the project through a Social Impact Bond.”

A social investment

A Social Impact Bond is a social financing mechanism which draws on private capital in order to finance an innovative social project. This approach involves a Social Services Provider who is responsible for implementing the project and an Outcomes Payer who undertakes to pay back the investors if the project is successful in meeting its goals.  An Independent Evaluator gauges the level of success on the basis of the initially-set measurable targets. The degree to which the service provider meets those targets during the project period will determine the repayment of capital to the investors. An Arranger takes care of the financial and legal structuring of the project.

A Social Impact Bond thus enables to test out innovative concepts and ways of doing things that are mostly geared to problem prevention. The Outcomes Payer will bear only the cost of proven impacts achieved by the project and those successful outcomes will moreover lead to overall cost savings for the community.  Part of those savings will serve to pay back the investors. Subsequently, if the project proves successful, the Flemish government may decide to support the programme on a regular basis under its subsidies policies.

The various parties

Oranjehuis has been appointed as the social services provider for the Back On Track project. The not-for-profit organisation will be responsible for running the project and achieving the goals set. The Opgroeien (‘Growing Up’) agency, a Flemish government body whose mission is to create opportunities for children and young people growing up in Flanders and Brussels, is the commissioner, i.e. the outcomes payer. LUCAS, an independent research team from the KU Leuven, will carry out an objective assessment of the project results.

Katrien Verhegge, senior official at Opgroeien, declared: “We’re proud that the project is calling on the long-standing experience and expertise of Oranjehuis. Innovative methodology borrowed from youth assistance programmes can certainly make a difference when it comes to vulnerable young adults as well.  We’re looking forward to seeing the first results.”

Professor Koen Hermans, from the LUCAS team at KU Leuven, explained: “In our assessment we will look at the concrete results that have been achieved and also take into account both the experiences of the young adults involved and of those providing assistance. This is an especially relevant project from a Social Science viewpoint as there is very little scientific evidence available on the Housing First for Youth policy.”

Four parties are investing in the project. They are:

• BESIX Foundation, a private foundation set up by Belgian construction group BESIX in 2009
• BNP Paribas European Social Impact Bonds Fund, recently set up by BNP Paribas and the European Investment Fund (EIF), and managed by BNP Paribas Asset Management
• Belgium-based bank BNP Paribas Fortis
• Labido Invest, part of the BOSS paints group

Frédéric de Schrevel, Chairman of BESIX Foundation and Head of CSR at the BESIX Group, underlined: “Having been involved in social projects all over the world for ten years, we’ve decided to invest in this Social Impact Bond, as we’re very impressed by both the innovative aspect of the methodology and the quality of the organisations running the project. The Back on Track project provides a new opportunity for the Foundation to support a social project which meets a real social need in Belgium and we’re very keen on the idea of actively participating in programmes designed to help integrate young people.”

Pierre Moulin, BNP Paribas Asset Management Executive Committee Member / Global Head of Products and Strategic Marketing, pointed out: “The BNPParibas European Social Impact Bonds Fund, created and managed by BNP Paribas Asset Management on behalf of the European Investment Fund (EIF) and BNP Paribas, is the first fund set up specifically to invest in SIBs in the European Union. This innovative financial instrument is designed to back projects that can achieve concrete, measurable results and help work towards an inclusive and sustainable society. Today we’re delighted to be able to support the Back On Track projectrun by Oranjehuis, the first Belgian Social Impact Bond to attract financing from our fund. For this project, Oranjehuis has come up with innovative ways of combining different approaches based on the Housing First principle in order to offer the best possible support to young adults who are left behind.”

Max Jadot, CEO, BNP Paribas Fortis: “As Belgium’s leading bank, we want to address important social topics and we see it as our responsibility to contribute to a more sustainable society. For example, over the next 3 years we will support ‘Back on Track’, a project to support young adults led by the non-profit organisation Oranjehuis. Working together with the BNP Paribas Group, we are the first bank in Belgium to arrange a Social Impact Bond (SIB) to fund this kind of project. So far, the BNP Paribas Group has developed its expertise in this area mainly in France, and in the United States, where it has arranged or jointly arranged 9 SIB issues for innovative social projects. They include initiatives to help veterans with post-traumatic stress disorder (PTSD) find employment, promote workforce reintegration among people in remote rural areas (the first SIB in France), and allow vulnerable children to stay with their families instead of being placed in foster care. A Social Impact Bond is a good example of financial innovation that supports social entrepreneurs. It allows the government to encourage innovative approaches, while only paying for them if they succeed. I wish all those involved in “Back on Track” every success: the project could make a world of difference to more than 100 young adults, while also saving a significant amount of money for our society as a whole. I would like to thank the European InvestmentFund (EIF), Besix Foundation and Labido Invest for the social and financial commitment they have shown. Together with them and the enthusiastic employees of Oranjehuis, we are committed to helping people grow."

Lieve Bossuyt, spokesperson for Labido Invest (BOSS paints), underlined: “The Back on Track initiative really speaks to us because it creates a framework – in a warm and human and at the same time sustainable and very professional way – within which highly vulnerable young people can work on building a decent future for themselves. We hope that this project will make it clear that a constructive, human approach to social challenges such as youth crime can offer our society much more – from a budget point of view as well – than an approach based on repression and exclusion. The Social Impact Bond formula appeals to us because it combines the strengths of various different parties –  social services providers, the authorities and private investors –  so that each can contribute according to their abilities towards a solution, instead of shirking responsibility.”

The BNP Paribas European Social Impact Bonds Fund has been set up together with the EIF under the umbrella of the European Fund for Strategic Investments (EFSI) – until recently known as the Juncker Plan. The purpose of the EFSI is to improve access to financing for a range of social organisations and social enterprises, with the general aim of boosting the development of the social business sector, essentially by attracting private capital to finance projects.

The financial and legal structuring of the SIB is being taken care of by BNP Paribas Fortis and the BNP Paribas Group. The legal structuring has been worked out together with law firm Curia.

Back On Track

The Back on Track programme is an initiative by the Courtrai-based non-profit organisation Oranjehuis, which has close to 50 years’ experience of working with children, young people and families in vulnerable situations. The organisation employs over 90 staff and has its own training centre, where Oranjehuis staff and partners from various fields can attend training sessions.

The programme is aimed at a) young people without income or accommodation who apply for overnight shelter and/or assistance from the CAW (General Welfare Centre) and b) young persons recently released from prison. In both cases, the focus is on young people who are homeless or facing (imminent) homelessness.

The aim of Back On Track is to help these youngsters to find accommodation, employment and a social network and so avoid falling back into undesirable behaviour. The most innovative aspect of the project is that it will adhere to the principle of Housing First for Youth, the first time that the Housing First-principle has been applied to young people in Belgium.

Intended impact:

• 113 young adults complete the 12-month program
• 85% of young adults completing the program obtain a renting agreement
• 40% of young adults completing the program have a legal income or starta training
• a 25% reduction of recidivism compared to a reference rate

One in five users of residential reception centres and assisted living and 10% of all users of night shelters are in the 18-25 age group. However, the assistance currently available to adult persons is unable to meet the demand among this age group. Moreover, there are long waiting lists and more intensive assistance is required. These are the needs that Oranjehuis intends to address through the Back On Track project.

Bert[1] is a 21-year-old man who, until a few months ago, was in prison on drug-related charges and is now staying with friends. “I want to take back control of my life but that’s not as easy as it sounds,” he says, explaining:  “I’m on three waiting lists, several social service departments know about me, but I still don’t know where I’m going to sleep tonight.”

The programme is scheduled to run for three years in the province of West Flanders and the Ghent and Oudenaarde regions. It will provide every young person taking part with one year of intensive assistance, and if it proves fully successful will ensure cost savings to society estimated at not less than €3.8 million.

Explains Wouter Vanclooster, Back On Track co-ordinator at Oranjehuis: “In the first instance we’ll be concentrating on the accommodation aspect. Then we’ll help each young person to rebuild, broaden and maintain their social network. We’ll help each young person to find their own path, with the emphasis on finding work or obtaining training.  For this we can count on the close cooperation of the Flanders Public Employment Office. For those youngsters who are leaving detention, we’ll be applying proven methodology from criminology research so as to reduce the risk that they will re-offend.”

Press Contacts:

Opgroeien agency: In April 2019, the Flemish government’s Youth Welfare, Child and Family department merged with part of VAPH, the Flemish Agency working on behalf of people with a handicap, to form the new Opgroeien (‘Growing Up’) Agency. The mission of the Opgroeien Agency is to create opportunities for every child and every young person growing up in Flanders and their families.

BESIX Foundation is a private foundation set up by Belgian construction group BESIX in 2009. Its purpose is to take action by providing financial support to charities and non-profit organisations running programmes in Belgium and abroad which come under one of three priority themes: education, environment and construction. In addition to financial assistance, BESIX Foundation also works through ‘skills philanthropy’, by both providing those organisations with expertise in order to help achieve their goals and encouraging BESIX staff to perform voluntary work. During these ten years, the Foundation has provided financial support totalling €4 million to 270 projects. In addition, it has run over 200 Solidarity Days and arranged for some 5,000 people to contribute voluntary work as part of the Foundation’s actions.

BNP Paribas (www.bnpparibas.com) is a leading bank in Europe with an international reach. It has a presence in 72 countries, with more than 202,000 employees, of which more than 154,000 in Europe. The Group has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. The Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the European leader in consumer lending.BNP Paribas is rolling out its integrated retail-banking model in Mediterranean countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Institutional Banking and International Financial Services activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific.

BNP Paribas Asset Management is the asset management arm of BNP Paribas, one of the world’s foremost financial institutions, and offers high value-added solutions to individual savers, companies, and institutional investors. It has a broad range of skills in four investment divisions: Equities, Fixed Income, Private Debt & Real Assets and Multi-Asset, Quantitative and Solutions (MAQS). Sustainability is at the heart of BNP Paribas Asset Management’s strategy and investment decision-making process, making an active contribution to energy transition, environmental protection and the promotion of equality and inclusive growth. Its aim is to achieve long-term sustainable investment returns for its clients. BNP Paribas Asset Management has assets under management of EUR 440 billion* (as at 31 December 2019), with more than 520 investment professionals and almost 500 client servicing specialists, serving individual, corporate and institutional clients in 72 countries.
* EUR 594 billion of assets under management and advisory as of 31 December 2019

BNP Paribas Fortis (www.bnpparibasfortis.com) offers the Belgian market a comprehensive range of financial services for private individuals, the self-employed, professionals, companies and public organisations. In the insurance sector, BNP Paribas Fortis works closely, as a tied agent, with Belgian market leader AG Insurance. At international level, the Bank also provides high-net-worth individuals, large corporations and public and financial institutions with customised solutions, for which it is able to draw on the know-how and international network of the BNP Paribas Group.

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.. www.eif.org

Labido Invest is a partnership of BOSS paints shareholders, set up in 2017 for the purpose of investing in projects that “provide significant added value in the social, cultural and environmental spheres”.
BOSS paints is a Belgian family company that develops, produces and sells high-quality paint products and decorating technology. In addition to manufacturing paint, BOSS paints is also a wholesaler of paint accessories, wall, ceiling and floor coverings and designs its own colour collections. Four BOSS paints depots are available to meet the needs of professional painting and decorating firms, while private customers are served at sixty franchised Colora shops in Belgium, plus one in the Netherlands. The 270 BOSS paints staff bring in annual turnover of some €49 million. In 2020 BOSS paints is celebrating its 75th birthday.

KU Leuven was set up in 1425. It is not only one of the oldest universities in Europe but also, according to Reuters, the most innovative. With some 58,000 students and over 20,000 staff, it is moreover the largest university in Belgium. Fifteen faculties offer courses at ten different locations in Flanders, leading to Bachelor and Masters degrees. The differing emphasis and educational approaches taken at the various campuses make for a wide range of educational experiences. Courses are based on research carried out by more than 7,000 academics. KU Leuven is a leading national and international research institution and is a founding member of the League of European Research Universities (LERU).

KU Leuven is Europe’s most innovative university. Located in Belgium, it is dedicated to research, education, and service to society. KU Leuven is a founding member of the League of European Research Universities (LERU) and has a strong European and international orientation. Our scientists conduct basic and applied research in a comprehensive range of disciplines. University Hospitals Leuven, our network of research hospitals, provides high-quality healthcare and develops new therapeutic and diagnostic insights with an emphasis on translational research. The university welcomes more than 58,000 students from over 140 countries. The KU Leuven Doctoral Schools train approximately 4,500 PhD students.

Since 1971, the Oranjehuis not-for-profit organisation (www.oranjehuis.be) has been accredited as a youth support organisation by the Flemish Ministry for Welfare, Public Health and Family. The organisation works with vulnerable children and young people, together with their families and background circumstances, in West and East Flanders. Starting from this core mission, annually supporting some 450 children and families, Oranjehuis has expanded its activities to all fields having a bearing on the general circumstances of children and young people in West and East Flanders, especially the family, education, employment and free time, plus the way assistance is structured. The organisation seeks to tailor its work to the real needs of those it supports by varying the type of assistance provided and its working methods. Oranjehuis has obtained further accreditation from the Flemish Ministry for Education for its work in youth training and employment assistance, from the Federal government’s Asylum and Migration department for its work with asylum seekers under the age of majority, and from the European Social Fund for its European projects. Oranjehuis is determined to set the benchmark for assistance provided to children, young people and families. The organisation undertakes social enterprise activities and also disseminates to its Welfare and Education partners in Flanders and abroad the vision and methods which it develops in practice, via its Ligand development and training centre.