A social impact bond, or SIB, is the next big thing in public-private partnerships, and could rewrite the rules of the game when it comes to government-funded social services. Essentially, it’s a financial instrument that enables government to partner with private investors to pay for social service programs. SIBs give the corporate world a financial stake in the well-being of the most vulnerable citizens. Perhaps most crucially, they provide the government a cushion against financial losses, allowing normally hamstrung taxpayer-funded agencies to take risks and innovate. Journalist Esha Chhabra gets answers to the difficult questions at the heart of this potentially paradigm-changing tool.
Go to NextCity.org to read the full 4,000 word feature on Social Impact Bonds.