Abstract

Benjamin Franklin’s adage, “an ounce of prevention is worth a pound of cure” is a reverberating theme within Social Impact Bonds (SIBs). Recently, SIBs have been gaining great interest as a new system for addressing social change by breaking down silos that impede investments in preventative and early intervention measures. Specifically by establishing a partnership amongst governments, non-profit organizations, private investors, and intermediaries, SIBs aim toward scaling social projects with high probability of success. SIBs complement traditional philanthropy and represent an alternative to traditional investments because funds are invested in projects that are expected to yield both social and economic results, with the economic benefits being shared with the private investors. In SIBs, through the convergence of motivations (diversifying revenue by non-profit organizations and a drive for outcome based measurement practices), mutualisation efforts aim to foster social partnerships by government and more sophisticated investors demanding new investment vehicles.

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