Toby Eccles Social Finance

Social Finance Pioneer: Toby Eccles and the Birth of Social Impact Bonds Toby Eccles is widely recognized as a pivotal figure in the development and implementation of Social Impact Bonds (SIBs), a pioneering financial instrument designed to address social problems while delivering financial returns to investors. His work has significantly contributed to the evolution of social finance, promoting a more outcomes-focused and data-driven approach to addressing complex societal challenges. Eccles’ journey into social finance began with his work at the Young Foundation, a London-based think tank focused on social innovation. It was here, in the late 2000s, that he conceived of the SIB model as a means to attract private investment into preventative social programs. The core idea was simple yet revolutionary: investors would fund social interventions, and their returns would be contingent upon the achievement of pre-agreed, measurable social outcomes. The government, or another outcome payer, would only pay if the program succeeded, thereby shifting the financial risk from the public sector to private investors. The first SIB, launched in Peterborough Prison in 2010, targeted the reduction of reoffending rates among short-sentence prisoners. Eccles played a crucial role in structuring this groundbreaking deal, navigating the complexities of aligning diverse stakeholders including the Ministry of Justice, social sector organizations, and private investors. The Peterborough SIB served as a proof of concept, demonstrating the potential of the SIB model to unlock new sources of funding and drive more effective social service delivery. Following the success of the Peterborough SIB, Eccles co-founded Social Finance Ltd, an organization dedicated to designing, structuring, and managing SIBs and other innovative financing mechanisms. Under his leadership, Social Finance Ltd expanded the application of SIBs to address a wide range of social issues, including homelessness, unemployment, and child welfare. They have advised governments and organizations globally on the design and implementation of impact bonds. Eccles’ influence extends beyond the specific structure of SIBs. He has championed a broader shift towards outcomes-based commissioning, emphasizing the importance of clearly defining desired outcomes and using data to track progress and improve program effectiveness. He argues that this approach fosters greater accountability and transparency, leading to better social outcomes and more efficient use of public resources. While SIBs have faced critiques regarding their complexity and transaction costs, they have undeniably played a vital role in raising awareness of the potential of social finance and driving innovation in the social sector. Eccles’ work has highlighted the importance of aligning financial incentives with social impact, encouraging a more collaborative and results-oriented approach to tackling pressing social problems. His dedication to promoting a data-driven and outcomes-focused approach continues to shape the field of social finance, fostering a more effective and impactful social sector.