Social impact bonds (SIBs)—also known as pay-for-success contracts—have emerged as a financing mechanism that brings to the government and nonprofit sectors the performance incentives and monitoring standards of private enterprise. In SIB projects, governments and other social welfare payers raise capital from the private sector for nonprofit-led social interventions, by offering the possibility of a financial return, as well as social impact. This Giving Thoughts article describes SIBs, highlights challenges and opportunities, and considers the role corporate social investing might play.
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