SOCIAL IMPACT BONDS
FOROMIC 2013
WHAT IS A SOCIAL IMPACT BOND?
A social impact bond is innovative financing
arrangement that turns intractable social problems
into investable opportunities. It is partnership in
which private impact investors – not governments
– provide capital for NGOs to scale up programs
that help poor and vulnerable populations.
The ultimate payment to investors is based on the
achievement of a predefined outcome. If the
outcome is not achieved, the government is not
required to repay investors.
FOROMIC 2013
2.
HOW DOES IT WORK?
Investors
6
1
Principal +
return
Government
(Or other outcome
payer)
5
Impact investors provide
capital to SIB intermediary
2
SIB intermediary provides
working capital to
NGOs/companies to
implement program
3
NGOs/companies
implement program
4
Independent evaluation
contracted to verify
impact
Investment
Special Purpose
Company
Payment on
success
1
(SIB Intermediary)
2
$$
$$
Private
Service
Provider
NGO
4
3
5
Gov’t pays principal plus
interest ONLY if impact
achieved
6
Investors get paid
$$
Independent
impact
evaluation
FOROMIC 2013
3.
ALMOST 40 SIBS WORLDWIDE IN DEVELOPMENT
Canada
• Various SIBs in
exploration at the
National level
Scotland
• Government
exploring SIBs in two
sectors
Ireland
United Kingdom
• Government
exploring SIBs in 5
topic areas
• Home of 1st SIB
• 14 SIBs overall, multiple
sectors
Germany
• Initial interest in SIBs
Israel
USA
• 3 SIBs under design
• Federal
government
designing 3 SIBs
• NYC launched SIB
on recidivism
• Massachusetts 2
SIBs
• SIBs being
developed in 7
States
India
• SIB for education
of girls
Colombia
Australia
• SIBs en exploration
for women’s health
and primary
education
Source: Information
provided by Instiglio
FOROMIC 2013
South Africa
Mozambique
• SIB in criminal justice
in Cape Town
• SIB to combat malaria
with financing from
mining companies
Rwanda
• SIB under
exploration
Uganda
• SIB with DFID y
Social Finance in
design for sleeping
sickness
•New South Wales
designing 3 SIBs in
recidivism and foster
care
4.
QUESTIONS?