During this year’s World Economic Forum meetings in Davos, Switzerland, the IKEA Foundation backed the development of an impact bond that would support refugee employment and skills training. To learn more about this innovative financial mechanism, GBC-Education spoke with Annemieke Tsike-Sossah, Refugee Liaison at the IKEA Foundation, about how impact bonds have the potential to transform education and workforce development in emergencies.
Below are the 4 things you need to know about impact bonds and how IKEA Foundation is supporting the most marginalized:
- An impact bond focuses on outcomes, rather than absolute funding: social impact bonds are part of a new trend in sustainable investing that is concerned more with measurable results; if a non-profit or implementation partner is supported by one of these bonds, then it will use that money to achieve a certain goal (e.g. ensure that 5,000 refugee children are in school) and, if that goal is reached, then the investor receives a return from the funder.
- IKEA Foundation is working with KOIS to create the first refugee livelihood development bond: during the meetings in Davos, Switzerland, IKEA Foundation shared the intention to commit EUR 6.8 million to fund KOIS’ Development Impact Bond, providing essential business support for refugee workforce development and skills training. The bond will focus on empowering refugee women and enabling entrepreneurs and apprentices to develop sustainable livelihoods.
- Impact bonds have the potential to transform the way business and corporate foundations invest in education and in livelihoods: the social impact bond space is one of the many avenues for businesses to support educational & livelihood development. In his book, “On Impact: A Guide to the Impact Revolution”, Sir Ronald Cohen promotes impact investing as the key to solving “complicated problems with urgency and ingenuity” in addition to reinventing how business views risk and return.
- Business can get involved with IKEA Foundation’s project to ensure that refugees have greater opportunity: with the IKEA Foundation as one of potentially many funders for KOIS’ Development Impact Bond, other businesses and corporate foundations – including GBC-Education member companies – can support and help mobilize at least $20 million for NGOs that have been selected for the impact bond.
IKEA Foundation’s support for innovative financial mechanisms showcases the potential for business to create opportunity for millions of people. By investing in workforce development, refugee education, and skills training, the private sector can ensure that economies and societies throughout the world remain stable and can grow.
To learn more about GBC-Education’s work in innovative education financing, follow the link here. For more information about the IKEA Foundation impact bond, please contact Chris Breen at firstname.lastname@example.org.