Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Capital on the Frontier Measure Better Investing in Racial Equity Beyond Trade-offs Impact en las Americas New Revivalists
Local and Inclusive Climate Finance Catalytic Capital Frontier Finance Best Practices Geographies
Slack Agent of Impact Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Locavesting Entrepreneurship Gender Smart Return on Inclusion Good Jobs Creative economy Opportunity Zones Investing in place Housing New Schooled Well Being People on the Move Faith and investing Inclusive Fintech
Clean Energy Farmer Finance Soil Wealth Conservation Finance Financing Fish
Innovative Finance
Personal Finance Impact Management
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States
Subscribe Log In

Small bet, big outcome for UBS’ girls education development impact bond

In 2015, the UBS Optimus Foundation placed a small bet on a big idea: that nonprofit development organizations could tap private investors for working capital.

Such a “development impact bond” would be repaid by a third-party payer, with interest, if the organization achieved target educational goals. The foundation made a $270,000 loan to Educate Girls, an Indian charity tackling inequality in India’s education system, to improve enrollment rates and improve education for girls in Rajasthan, India.

The charitable arm of the Swiss Bank now says the bet paid off.

  • The results: Educate Girls enrolled 768 girls between six through 15 years old (or 92% of eligible out-of-school girls in the region), That was 116% of its enrollment target. Educate Girls helped students increase learning levels by 79% more than their peers, or 160% of the target.
  • Because impact targets were hit, UBS Optimus Foundation will earn a pre-determined return of $144,085, a 15% internal rate of return over the three-year investment. That principal and return will be paid by Children’s Investment Fund Foundation, the charitable arm of former hedge fund manager Chris Hohn and his wife, Jamie Cooper. Educate Girls will receive about one-third of the return; the rest will be used for programs at the foundation.
  • Innovation stage. More than 100 social impact bonds have raised more than $400 million in total and touched more than 700,000 lives in two dozen countries. (SIBs are similar to DIBs except the payer is generally a government). Ten projects have returned investors’ capital, with a return, and another eight have begun making payments. About 30 development impact bonds (in which the payer is a philanthropy or aid agency) are active or in development, including a UBS-backed maternal health impact bond in India.

You might also like...