Develop the technical, legal and financial aspects for the implementation of a pay-by-result contract to finance the activities aimed at reducing the school dropout rate of students with foreign origin.
The SIBforGrowth project aimed to develop the technical, legal and financial aspects necessary for the implementation of a pay-by-result contract, addressed to finance activities to reduce school dropout in students of foreign origin.
During the project a feasibility study of the instrument was developed, which includes the definition of the governance structure, the contractual agreements between the actors involved and the financial structure, in terms of investment duration, risk rate and expected return.
The proposed model envisages the activation of a concession contract in line with the public private partnership approach (PPP). These kind of contracts make it possible to define a remuneration structure in which the risk in the return of capital (up to 51% of the total) and the remuneration of the investment are linked to the results obtained in terms of social impact.
Such contracts require the participation of a service provider (which will carry out the activities in favor of the students) and of one or more investors, who will provide the necessary capital to ensure the financial coverage of the action.
The value of the remuneration is calculated based on the expected results (and their probability distribution).
The sustainability of the initiative for the Public Administration, in a logic of value for money, is ensured by the savings generated in the medium-long term (linked to direct costs of repetition and subsidies, in addition to indirect costs related for example to the lack of tax revenue and to unemployment).
• Regione Piemonte- Directorate for Social Cohesion / IT
• Forum of the Third Sector in Piedmont / IT
• Next Level Association / IT