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  • 1. Development Impact Bonds Presentation  
  • 2.    
  • 3.    What are DIBs? o How they are similar to and different from Social Impact Bonds – are they more effective? o The need for DIBs  What they are and how they fit into the social and economic sector  How do DIBs work o Who can implement them?  Governments role Third party for risk responsibility Funding SIBs  Donor Agencies role DIBs Outcomes Fund DIB Community of Practice  Foundations role Launch market by investing in DIBs Promote design of DIBs
  • 4.  Investors role DIB Investment Funds  Intermediaries Promote design of DIBs Share knowledge of bonds  Service Providers Build systems to create results for DIBs  Challenge of DIBs o Are development results worth the risk? o How will governments address the needed resources and time it takes DIBs to develop and produce results? o How can the return on investment grow larger?  Cases of DIBs o SIBs implemented in Massachusetts, NYC, and Connecticut – how can DIBs be implemented in the U.S.? o International use of DIBs  Uganda, Ghana, and the UK o SME’s and DIBs o Energy Efficiency and DIBs  How can Case Foundation implement DIBs o Strategy recommendations  Promote pilot DIB interventions Subsidize costs  Establish a research data protocol  Establish a DIB Community of Practice of potential donors and investors o Benefits and possible results  Instead of providing grants where money is spent regardless of whether or not progress is made and only focuses on the inputs of the grant, foundations could focus on the outcomes and have an incentive to invest in a socially and economically profitable program https://www.youtube.com/watch?v=3YJ1FkZubZ8 http://www.brookings.edu/blogs/education-plus-development/posts/2014/04/02-early- childhood-development-social-impact-bonds-gustafsson-wright-atinc http://www.bizcommunity.com/Article/196/11/111819.html http://www.institutionalinvestor.com/Article/3328573/Asset-Management-Fixed- Income/Investment-Firms-and-Corporates-Embrace-Sustainable-Bonds.html#.U0WqzPldXkY
  • 5. https://www.youtube.com/watch?v=Mb_rKoqRWc0 http://www.ted.com/talks/toby_eccles_invest_in_social_change#t-507760 http://www.cgdev.org/blog/who-would-invest-development-impact-bonds One difference is who repays investors if the program succeeds. With a social impact bond, the government does. With a development bond, payment would fall to international donors such as foundations or government agencies such as Britain’s Department for International Development or the U.S. Agency for International Development.” http://www.americanprogress.org/issues/economy/news/2013/04/23/61163/white-house- budget-drives-pay-for-success-and-social-impact-bonds-forward/ http://www.frbsf.org/community-development/files/rikers-island-first-social-impact-bond- united-states.pdf http://www.socialfinanceus.org/sites/socialfinanceus.org/files/Foundation%20for%20Social%2 0Impact%20Bonds,%202014.pdf Bank of America http://newsroom.bankofamerica.com/press-releases/global-wealth-and-investment- management/bank-america-merrill-lynch-introduces-innovat
  • 6. Goldman Sachs has invested in two SIBs so far: one aimed at reducing recidivism among adolescent offenders in New York City and one to expand early childhood education programs in Utah. Moreover, Goldman has announced that it plans to raise $250 million for a Social Impact Fund that would invest in things like affordable housing, healthcare, schools, and job creation for disadvantaged communities http://www.nytimes.com/2012/08/02/nyregion/goldman-to-invest-in-new-york-city-jail- program.html?_r=0 Dalberg Capital has also gotten the support of the restaurant chain Nando’s to develop a DIB to reduce malaria prevalence in Mozambique, and are engaging foundations who are possibly interested in investing Donor agencies or governments who commit to paying for outcomes are likely to drive the development of early DIB pilots (perhaps with the support of intermediaries and catalytic funding from foundations to reduce early stage transaction costs, as the DIB Working Group recommends) http://harvardmagazine.com/2013/07/social-impact-bonds Although initial results from the first SIB projects are a few years away, government interest is growing: when Liebman received additional Rockefeller funds to expand the SIB Lab’s work into four more states, 28 state and city governments applied. (The winners were announced June 10.) The investor market remains harder to predict. George Overholser ’82, the founder and CEO of Third Sector Capital Partners (the intermediary on the Massachusetts recidivism project), notes that banks have responded more quickly to the opportunity than foundations or individuals. “Social innovation financing is not a heartstring puller, but the upside is powerful,” he says. “With traditional philanthropy, you pay for the program and then the money is gone; this way the money comes back and can be recycled into the program to help more people.”
  • 7. It is too soon to say if social impact bonds will fundamentally change how social services are funded and implemented in the United States. But Liebman sees hope in the way the projects bring public and private actors together on a long-term basis to tackle some of society’s toughest problems. “The key,” he says, “is that all the partners are on the hook for developing better outcomes.”