Social Impact Bond

A Social Impact Bond (SIB) is an innovative funding model where private investors provide upfront money for social programs, such as reducing homelessness or improving education. If the program achieves its specified outcomes, a government or organization repays the investors with a return, often funded by cost savings or benefits realized from the program’s success. Essentially, it shifts some financial risk from public agencies to private investors, incentivizing effective interventions while ensuring public funds are only spent if positive results are achieved.