This document discusses social impact bonds and how they work. Social impact bonds allow investors to fund social service organizations working with a target population. If the organizations deliver positive social outcomes, the government pays investors based on the results. This provides funding for interventions while transferring performance risk from the government to investors. The six key steps are: 1) government and investors sign a contract setting payment amounts per outcome, 2) investors provide funding based on the contract, 3) funding is used by social service organizations to work with those in need, 4) the organizations deliver services to improve outcomes, 5) positive outcomes are achieved benefiting society and reducing government costs, 6) the government pays investors based on results achieved.

1. Social Investment
Dharmendra Kanani
Director of England
28 December 2012

2. Social Impact Bonds: Pioneering and Innovative
Sign contract in which a fixed value Raise investment based on the contract
1 is paid per positive social outcome 2 with government
Social Impact Bond
Government Investors
Fund
Government pays amount based Investors receive payments from government
6 on positive social outcome 7 net of the cost of funding interventions
delivered
The SIB fund is used to provide grants to fund the
3 work of service organisations with the target
population
Service
5 Positive social outcomes Organisations
deliver benefits to society and
cost savings to government The service organisations work with the target
4 population and deliver social outcomes
Contract Target population
Funds
Benefits

3. Bryan’s story
• Homelessness The One
• Alcoholism Service
• Prison

4. Phil’s story
Initial frustrations
Gap in the market
Cool2Care - 2008 pilots
Social investment – loan funding
Next Steps – mini-SIB

5. Our story
Product innovation
• Peterborough SIB
• Grant to Social Finance
• Next Steps: Supporting social investment in England
Working with commissioners
• Co-Commissioning Fund
Support for social entrepreneurs and VCSE organisations
• Investment Readiness Fund
• Social Incubator Fund
• Big Venture Challenge / School for Social Entrepreneurs