This document defines social impact bonds and outlines their key components. Social impact bonds are an innovative financing mechanism where private investors provide upfront capital for social programs, and the government only pays if pre-defined outcomes are achieved. The document discusses the main stakeholders in social impact bonds (investors, intermediaries, service providers, evaluators), common structures (direct, intermediated, managed), geographic scope, opportunities and challenges. It concludes by emphasizing the need for further evidence on social impact bonds and recommending governments provide supportive frameworks and consider social impact bonds as a complement rather than replacement for traditional social services delivery.