Social Impact Bonds (SIBs) are a unique public-private-nonprofit partnership. The power of SIBs lies in the alignment of all stakeholders’ interests around achieving social outcomes for the benefit of poor and vulnerable populations. Despite its elegant structure, forming and maintaining the partnerships that are the foundation of the instrument can be very challenging.
In order for SIBs to be successful and achieve the goal of producing greater social impact at a lower cost to the public sector, the development process must be collaborative. Key players—nonprofits, government, investors, intermediaries, and evaluators—must reach agreement at the outset and maintain consensus over the life of the instrument. During the SIB, they must engage in coordinated activities in order to achieve the agreed-upon outcomes. The identification and selection of qualified parties, the allocation of responsibilities among them, and the synchronization of their work are critical success factors.
In order to mitigate the risk involved in this multi-party initiative, a qualified third-party intermediary should manage the network of involved players and initiate and coordinate the required activities during all phases of SIB development and implementation. Social Finance fills the intermediary role from initial SIB development through the duration of the instrument.
Social Finance UK
T 617-939-9900
info@socialfinanceUS.org
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