Social Impact Bonds (SIBs) are an innovative funding model that uses private sector capital to solve pressing social problems. SIBs have a double bottom-line: they offer investors the opportunity to make a significant social impact alongside a financial return.
SIBs are also known as “pay for success” bonds. Investors are repaid if the initiative succeeds. SIBs are entirely based upon performance, so their rates of return vary.
Interventions supported by SIBs, such as pre-kindergarten, are carefully chosen based on the evidence-base, and are carefully monitored. Data is collected across the life of the SIB, allowing for an accurate and rigorous evaluation.