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Social Impact Bonds

Helping state and local governments fund critical social programs.

Overview

Federal, state, and local governments are facing a financial crunch, and social services—especially prevention-oriented services—often face cutbacks or elimination, impacting vital areas including healthcare, education, poverty, and the criminal justice system.

  • SIBs are an innovative financial tool to help governments facing tough budget decisions fund critical social programs. In 2013, states faced $85 billion in federal grant cuts.

Sitting at the nexus of the Foundation’s work in scaling innovation and impact investing, social impact bonds (SIBs), like ‘pay-for-success’ projects, represent one component of the rapidly growing field of innovative finance, aimed at helping state and local governments fund critical social programs through a combination of government initiation, private investment, and non-profit implementation. In the social impact bond model, the private sector works with governments and philanthropies to fund critical prevention focused social programs that help address the world’s most pressing problems. In this public-private partnership, investors are only repaid if and when improved social outcomes are achieved. Social impact bonds have the potential to open new funding sources for prevention-oriented programs that deliver measurable social benefits, saving taxpayer dollars in the process.

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Impact Investing and Innovative Finance

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Brinda Ganguly, Sr. Associate Director, VP, Initiatives & Strategy, The Rockefeller Foundation
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Margot Brandenburg, Former Senior Associate Director, Foundation Initiatives
Margot Brandenburg, Former Senior Associate Director, Foundation Initiatives

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