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The social impact bond is a non-tradeable version of social policy bonds, first conceived by Ronnie Horesh, a New Zealand economist, in 1988. [13] Since then, the idea of the social impact bond has been promoted and developed by a number of agencies and individuals in an attempt to address the paradox that investing in prevention of social and health problems saves the public sector money, but ...
The first social impact bond was originated by Social Finance UK in 2010, [1] [2] supported by the Rockefeller Foundation, structured to reduce recidivism among inmates from Peterborough Prison. Based on the SIB model, a DIB creates a contract between private investors and donors or governments who have agreed upon a shared development goal.
Notable examples of social finance instruments are social impact bonds and social impact funds. [9] Since the 2007–2008 financial crisis, the social finance industry has been experiencing a period of accelerated growth as shifts in investor sentiment have increased demand for ethically responsible investment alternatives by retail investors.
At its core, impact investing is about an alignment of an investor's beliefs and values with the allocation of capital to address social and/or environmental issues. Impact investors actively seek to place capital in businesses, nonprofits, and funds in industries such as renewable energy, [2] housing, healthcare, education, microfinance, and ...
Social Finance helped develop the first Social Impact Bond project in the world in the UK in 2010, [6] a six-year social impact bond pilot scheme run by Social Finance to see around 3,000 short-term prisoners from Peterborough prison, serving less than 12 months, receiving intensive interventions both in prison and in the community. Funding ...
Social impact bonds (also called Pay for Success bonds) are "a public-private partnership which funds effective social services through a performance-based contract." [9] They operate over a fixed period of time, but they do not offer a fixed rate of return. Repayment to investors is contingent upon specified social outcomes being achieved. [10]
Educate Girls work from 2015-2018 was partially funded by the world's first education related Development Impact Bond. Husain lauded this model because resulted based financing allowed Educate Girls to be innovative in their practices. [9] [3] The program surpassed all its targets for the bond payouts. [3]
The British Asian Trust is leading an innovative model of social-impact financing, in the form of Development Impact Bonds (DIB), allowing the Trust to set up initiatives to improve the quality education in India. The DIB mechanism involves public-private relationships between ‘risk’ investors, programme implementers and outcome funders.