social impact bonds foromic 2013. 2.2. what is a social impact bond? a social impact bond is...
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SOCIAL IMPACT BONDS
FOROMIC 2013
2.
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
3.
HOW DOES IT WORK?
Special Purpose Company
(SIB Intermediary)
NGO
Investors
Government(Or other outcome
payer)
Investment
Payment on success
Principal + return
11
22
33
55
Independent impact
evaluation
44
66 11Impact investors provide capital to SIB intermediary
SIB intermediary provides working capital to NGOs/companies to implement program
NGOs/companies implement program
Independent evaluation contracted to verify impact
Gov’t pays principal plus interest ONLY if impact achieved
Investors get paid
22
33
44
55
66
Private Service
Provider
$$$$
$$
FOROMIC 2013
4.
Canada•Various SIBs in exploration at the National level
Scotland •Government exploring SIBs in two sectors
United Kingdom• Home of 1st SIB•14 SIBs overall, multiple sectors
USA •Federal government designing 3 SIBs•NYC launched SIB on recidivism •Massachusetts 2 SIBs•SIBs being developed in 7 States
Israel • 3 SIBs under design
Australia •New South Wales designing 3 SIBs in recidivism and foster care
Ireland•Government exploring SIBs in 5 topic areas
South Africa•SIB in criminal justice in Cape Town
Mozambique• SIB to combat malaria with financing from mining companies
India• SIB for education of girls
Uganda•SIB with DFID y Social Finance in design for sleeping sickness
Germany•Initial interest in SIBs
Colombia•SIBs en exploration for women’s health and primary education Rwanda
•SIB under exploration
ALMOST 40 SIBS WORLDWIDE IN DEVELOPMENT
FOROMIC 2013
Source: Information provided by Instiglio
QUESTIONS?