Social Impact Bonds
Social impact bonds (SIBs) are designed to help reform public service delivery. SIBs improve the social outcomes of publicly funded services by making funding conditional on achievi. Investors pay for the project at the start, and then receive payments based on the results achieved by the project. https://www.gov.uk/social-impact-bonds
The basic model of a Social Impact Bond is that a charity agrees with a public funder that it will try to solve a problem or deliver a very specific service.
If the charity succeeds in reducing the problem or successfully delivering the service, the public body will make a payment. Otherwise, it pays out nothing.
But the charity doesn’t take the risk. That risk is taken by social investors, who front the cash to deliver the service. They will make a profit if the intervention works. If the intervention fails, they will lose out.
Whether the intervention works or not, with a SIB the delivery organisation is financially secure.
However, currently there is only one Social Impact Bond in Wales, The Capitalise Project is a Department of Work and Pensions Innovation fund project in Wales designed to address cognitive behaviour issues and low achievement in young people (age 14-16) to improve engagement in school and raise achievement level.
Social impact bonds have several advantages but face challenges to success including complexity, scale and difficulty proving their effectiveness, according to a report commissioned by the Big Lottery Fund.
Click link here to read more