Meet the Social Impact Bond, a win-win solution to problems
This tool unites the public, private and people sectors to achieve social outcomes.
IS there always a hard choice between doing good and doing well?
Around the world, a new tool called the "Social Impact Bond" (SIB) is gaining popularity. This is an innovative way for the public, private and people sectors to collaborate in achieving social outcomes.
Here's how it works:
First, the government specifies a social-issue area where it would like to see an impact. Second, a group of private investors find and fund a non-profit group to deliver that social impact. Third, an independent evaluator rigorously measures the social impact of the non-profit. Finally, the government repays the private investors - if and only if the specified social impact is achieved.
For example, in Boston, where I have been working on SIBs for several years, the government wanted to solve the problem of youth ex-offenders returning to jail. To solve this problem, Goldman Sachs and a coalition of philanthropists made a six-year investment in a non-profit or…
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