Spain launches its first Social Impact Contract, and UpSocial leads Lot 2 on labour market inclusion

Social Impact Contracts (SICs) offer the opportunity to test new interventions without risk — generating evidence before scaling them and transforming them into public policy or incorporating them into social service portfolios.

Public administrations have traditionally focused on maximizing service coverage rather than on the outcomes those services generate. As a result, success is measured in terms of the number of beneficiaries served. This approach does not prevent the chronic nature of social problems, nor does it encourage the search for more efficient and effective solutions. It also discourages investment in prevention as a mechanism to reduce the incidence, depth, and costs of those problems.

Social Impact Contracts change this logic: the focus shifts from coverage to impact. Payment is made for results, not for activity. SICs therefore make it possible to experiment with new interventions without risk, generating evidence before scaling them and transforming them into public policy or including them in social service portfolios. The risk of unsuccessful experiments falls on private investors.

How does a Social Impact Contract work?

In this model:

• A social organization delivers the service.
• A social investor finances its implementation.
• The outcomes payer —a public administration or another entity— reimburses the investment (with a small return) only if the agreed results are achieved.

This model turns administrations into outcome payers, creating incentives to support innovative solutions with proven impact.

Why invest in SICs?

Social Impact Contracts make it possible to:

• Mobilize resources to consolidate and scale effective interventions.
• Invest in prevention.
• Base decisions on evidence of what works and what doesn’t.
• Work with realistic timeframes to achieve sustainable transformations.

They thus become a catalyst for public innovation, redefining relationships between administrations, social service providers, and investors

A national milestone: the Málaga Provincial Council launches Spain’s first public SIC

Since 2010, when Social Finance UK launched the first Social Impact Bond in the United Kingdom, UpSocial has been one of the main promoters of the model in Spain.

Finally, in December 2024, the Málaga Provincial Council launched the country’s first public call for a Social Impact Contract. The tender included three lines of action:

• Reducing food insecurity
• Social and labour market inclusion
• Combating loneliness among older people

We are proud to share that UpSocial has been awarded Lot 2 on Social and Labour Inclusion, as the coordinator of the consortium that will implement the contract.

We will do so in partnership with:

• Arrabal, a social organization with strong local roots and extensive experience in inclusive employment.
• A group of leading social investors: Bridges Outcomes Partnerships (Reino Unido), BNP Paribas (Francia), CREAS y Open Value Foundation (España)

From UpSocial, we will coordinate the SIC across all its phases: implementation, monitoring, engagement with public actors, and facilitation among organizations, investors, and evaluators. This award reflects our commitment to advancing effective and sustainable solutions with measurable and verified impact.

UpSocial works to ensure that effective solutions go further. And Social Impact Contracts are a key step to make it happen.