Social Impact Bonds Research Articles

Social impact bonds in the UK homeless sector: perspectives of front-line link workers

Purpose Social impact bonds (SIBs) have become a favoured way to fund public services, including housing, prison and homelessness projects, in an era of austerity. In a growing critical literature on SIBs, a largely absent voice is that of the link worker. This paper aims to focus on the views of link workers in a SIB funded project which works with long-term entrenched rough sleepers in the East of England. Design/methodology/approach Interviews with link workers were conducted with a thematic analysis echoing many of the views expressed in the critical literature not only about the problems but also some of the advantages that SIBs offer to this type of project. Findings Three key themes were discomfort with the funding mechanism; flexible and innovative interventions that SIBs make possible; and problems with the outcome measures that trigger payments. This study concludes that if SIBs are to achieve their promise of providing funding which leads to effective solutions to deeply ingrained social problems, there needs to be more careful evaluation of their true benefits in comparison to publicly funded projects, adoption of more appropriate and project-specific outcome measures and a much clearer explanation and justification of the way in which SIB funding works. Originality/value Few studies have specifically explored the perceptions of front-line link workers in the homelessness sector. This study highlights not only the concerns but also the benefits associated with the use of SIB as a funding mechanism within the homelessness sector.

Social Impact Bonds: Development Prospects in the Russian Federation

Amid the state budget deficit, there is a problem of financing social projects. In this regard, new sources of extrabudgetary funding for social issues need to be sought. Financial instruments capable of implementing various social programs include social bonds. This study identifies the main characteristics of social impact bonds (SIB): fundamental principles, mechanism of work. The current work describes the practice of implementing social impact projects on education, poverty, ecology, etc., presenting the experience of the USA and several European countries. This study analyses Russia’s present state and prosperities in the development of SIB projects. The research defines the unique catalyst-funds role in processes of impact investment, as well as the suitability of their creation in Russia. The author analyses opportunities and likely risks from social impact projects realization.

Social Impact Bonds: An Innovative Mechanism of Funding for Social Problems in Developing Countries

In today’s complex world the government resources and charitable donations are insufficient to address the world’s social problems. An impact investment offers a new alternative for channeling private capital for social benefit .Social Impact Bonds (SIB) an innovative financial instrument which facilitates fund flows to address major social problems. It is a public-private partnership that drives government resources toward social programmes.

Social Impact Bonds: A Response

Reeve, Hrynuik, and Devine’s insightful research into social impact bonds (SIB) is very comprehensive and demonstrates the enigma such bonds pose to all investors, not just Christians. SIB investments are relatively new and are designed to fund social justice programs with a twist, focusing on early intervention and prevention via joint private-government solutions. For example, if SIBs could fund a project to reduce the probability of a person becoming homeless, then resources and taxpayer money could be diverted away from building homeless shelters and towards other critical societal needs (programs moving people to employment prior to homelessness occurring). The twist is that SIB investors assume the risk for holding that bond, earning returns only if key benchmarks are achieved (i.e., homelessness is reduced by a certain percentage), and questions still remain how those benchmarks are set.

Social Impact Bonds: Developing a Christian Perspective

Social Impact Bonds (SIBs), a form of impact investing, were first introduced in 2010 and enable investors to finance innovative projects to create a measurable social benefit. If the project is successful, investors are paid principal plus an agreed-upon return. This paper summarizes the current state of these bonds and concludes with a Christian perspective.

Performance management in social impact bonds: how an outcomes-based approach shapes hybrid partnerships

PurposeThis paper investigates how outcomes-based performance management (PM) regimes operate in the partnerships known as social impact bonds (SIBs), which bring together partners from the public, private and third sectors. The findings are analysed in the light of the different cultural world views of the partners.Design/methodology/approachPublished evaluations of 25 UK SIBs were analysed by a qualitative multiple case study approach. This study of secondary sources permitted the analysis of a wide range of SIB partnerships from near contemporary accounts.FindingsOutcomes frameworks led to rigorous PM regimes that brought the cultural differences between partners into focus. While partnerships benefitted from the variety of viewpoints and expertise, the differences in outlook simultaneously led to strains and tensions. In order to mitigate such tensions, some stakeholders conformed to the outlooks of others.Practical implicationsThe need to achieve a predefined set of payable outcomes embeds a “linear” view of intervention and effect on the SIB partners and a performance regime in which some partners dominate. In designing accountability systems for partnerships such as SIBs, commissioners should consider how the performance regime will affect the interests of all stakeholders.Originality/valueThis study adds to the cultural theory literature which has rarely considered three-way partnerships embodying hierarchical, individualist and egalitarian world views and how performance regimes operate in such partnerships. Three-way partnerships are thought to be rare and short-lived, but this empirical study shows that they can be successful albeit over a predefined lifespan.

Critical Success Factors, Motivations, and Risks in Social Impact Bonds

Social impact bonds (SIBs) have emerged as one of the most innovative financial instruments designed to support the social service sector in the delivery of innovative social programs. Despite the growing interest of academics and practitioners in SIBs, the debate appears polarized around a series of recurrent aspects, and only a limited number of studies have sought to understand the risks and motivations related to similar initiatives. Using an exploratory approach based on a mixed-method grounded theory methodology, this study analyzed the results of 12 questionnaires that asked experts about their experiences and perceptions in SIB project development and implementation. The study identified and assessed three main groups of motivations, critical success factors, and risk factors by focusing on the private-sector SIB actors with the aim of understanding their motivations and their perceived main success drivers and risk factors. This work contributes to the knowledge on the conditions for attracting private sector actors and supporting policymakers in the development of new SIB models. The findings could facilitate the development of risk management practices for the purpose of stimulating the participation of private actors in SIB initiatives.

Special Issue: Social Impact Bonds and the Urban Transformation

This special issue, “Social Impact Bonds and the Urban Transformation,” presents a set of articles that examine the tricky implementation process of Social Impact Bonds (SIBs) in diverse urban sett...

Expanding the Concept of Social Impact Bonds

This article elaborates on the emerging concept of social impact bonds (SIB) by investigating the configuration of a SIB in a new empirical setting – Scandinavia. The analysis is based on a single case study of a SIB-development project in Denmark, which constitutes the first attempt to build a social impact bond in the country. The article investigates four elements of the SIB-model: 1) the configuration of roles and responsibilities, 2) service provision, 3) payment structure, and 4) evaluation. The findings show the existence of blurred boundaries between organisational stakeholders within the investigated SIB-programme, indicating a dynamic configuration of roles and responsibilities. Furthermore, both service provision and data collection procedures were conducted in close collaboration with the involved public authorities, implying an interdependent relationship between public authorities and external partners. Thus, the empirical findings indicate a divergence from traditional concepts of social impact bonds – specifically concerning their design and development. Empirical evidence has been collected through interviews, statistical data, and internal documents.

Contratos de impacto social na rede estadual de São Paulo: Nova modalidade de parceria público-privada no Brasil: Comentário

Esse texto apresenta comentários ao artigo de Cássio, Goulart e Ximenes (2018), que analisa as bases técnicas e éticas que conduziram ao contrato de impacto social no contexto da Secretaria de Estado da Educação de São Paulo (SEE), levado para consulta pública ao final de 2017. À luz de fatos e da literatura especializada, apresentam-se comentários críticos sobre a interpretação de Cássio et al. (2018) dos eventos reportados, com foco em três pontos principais: entendimento do que é um contrato de impacto social; o envolvimento e a autonomia das escolas; e a metodologia sugerida para avaliação de impacto.

Social impact bonds and fast policy: Analyzing the Australian experience

Social impact bonds (SIBs) are attracting an increasing amount of critical scholarly attention. As an outcomes-based mechanism for financing social services, SIBs financialize social policy through the logic of impact investing. Responding to calls for attention to the politics of SIBs’ development, and breaking with the literature’s focus on cases from the UK and USA, this article explores the emergence of SIBs in Australia. It employs the concept of “fast policy,” which theorizes why and how policies move across borders, and describes the contemporary conditions that enable them to do so. Using document analysis, the article explores the discursive devices and practices used to justify the “pulling in” of SIBs to states in Australia. It finds that key actors in the Australian social impact world justified SIBs’ adoption using their synergy with powerful, popular policy discourses and practices, rather than engaging in political debates about their desirability. The Australian experience illuminates the power of intermediaries and the investors they represent over the design and proliferation of SIBs, as well as the roles played by austerity politics, policy experimentalism, and fast policy infrastructures in producing a context in which SIBs could be made real.

Sustainable Financial Partnerships for the SDGs: The Case of Social Impact Bonds

The 2030 Agenda for Sustainable Development brought the critical challenge of how private capital can support its new goals—the Sustainable Development Goals (SDGs)—to the attention of finance, business and policy actors. Impact finance instruments, which aim to obtain both financial and positive social/environmental returns simultaneously, can serve as effective institutional mechanisms to support the financing of SDGs. Social impact bonds (SIBs) are part of this emerging field. SIBs represent multi-stakeholder partnerships, built on outcome-based contracts, designed to harness private impact-oriented investors, service providers and public entities to address social or environmental problems. SDG 17 considers partnerships priority instruments for the achievement of SDs targets. This paper provides an exploratory analysis into the field of Social Impact Bonds and aims to (i) understand how such instruments are suitable for involving sustainable economy actors in SDG-based partnerships; (ii) determine the interplay between SIBs and SDGs. In order to address these questions, the article presents a multiple case study that includes a cross case analysis of four SIBs experienced in different social policy areas and different countries. As secondary step, the study matches phases and activities of SDG-based financial partnerships derived from a literature review with those experienced by each SIB case study. The results show that SIBs are fully compliant with SDG-based financial partnership structures derived from the literature, and their architecture reveals a high degree of SDG investment readiness. The originality of the research consists of including SIBs in the analysis of the new financial tools for the achievement of the SDGs, and extending them into the field of partnerships for the Goals, at the center of SDG 17. The paper fills the significant gap in the current research related to the issues of financing sustainable development and financial sector instruments on sustainability.

Betting on children at risk: Actors’ views on the introduction of social impact bonds in the French field of “childhood in danger”

ABSTRACT Social impact bonds (SIBs) were recently introduced in France as a result of the creation of a state label. A set of promises were associated with the bonds allowing experimental projects to test new methods in dealing with social risk. Social entrepreneurs offered to pioneer them and engage in social innovation. Yet the device immediately triggered questions about the benefits of this type of public−private partnership and the compatibility of the welfare system with social finance. Empirically, it had already been tested abroad, with mixed results. Theoretically, some assumptions to help modelize social risk proved debatable. This paper documents key actors’ views on SIBs in terms of their present and foreseeable effects. Its specific subfield is that of children’s services. Its main contribution is dual. It first consists of identifying what type of arguments and positions work better to promote SIBs in France. Secondly, it points to several forms of decoupling between discourse and practices caused by the superior success of moderate and relatively vague descriptions of SIBs as a set of promises, prefigurative of a major restructuration of the field.

Book Review - Payment by results and social impact bonds: Outcome-based payment systems in the UK and US

Book Review - Payment by results and social impact bonds: Outcome-based payment systems in the UK and US

Delineating social finance

This paper reviews social finance. Venture philanthropy, microfinance, crowdfunding and social impact bonds are financial and social innovations that reshape capital markets, the production of public goods, entrepreneurship and the fundamental principles of financial analysis. In this context, the pursuit of social and environmental impact is assessed alongside the tradeoff between risk and expected return. The market for impact investments consists of suppliers of capital, recipients of capital, the institutional framework and financing flows. This paper describes the financial market for the pursuit of impact and highlights principal challenges, such as the small scale and long horizon of social ventures, the lack of standardized reporting and financial measures for social outcomes, as well as the elusive causality between impact investments and social change.

Social Uncertainty Evaluation of Social Impact Bonds: A Model and Practical Application

In the last years, Social Impact Bonds (SIBs) have gained popularity in the impact investing space. A number of scholars and practitioners are debating—in theory and practice—the opportunities, challenges and obstacles of these financial models. Amongst others, social uncertainty evaluation metrics appear as a critical factor for the future development of the SIB market. The present work aims to shed some light on this issue, by realizing a practical application of a model—which is an extension of a framework previously proposed—for social uncertainty evaluation in SIBs. In our exploratory analysis, 34 SIBs were selected for the empirical tests. We combined the Analytic Hierarchical Process (AHP) with the creation of aggregate measure, deriving by suitable indicators at the end of the tree. Our findings open new avenues for future research in the field of uncertainty factors in the SIB landscape. Finally, our results represent a basis for implementing a prediction model for social uncertainty evaluation.

Micro-processes of public good social innovation in the Australian social impact investment market

Social impact bonds (SIBs) are strategic alliances aiming to generate financial profit through social innovation in the delivery of public social services. SIBs are also a product on the social impact investment market. There is little evidence for SIBs' effectiveness, and their ongoing international popularity partly rests on a theoretical premise that market mechanisms can effectively generate and diffuse social innovation. However, the literature contains no empirical consideration of whether and how this premise applies to public good social innovations. Our empirical study fills this gap by finding that public good social innovations are stimulated by market mechanisms, and markets are in turn shaped by these innovations. Despite this, public good social innovations eventually break away from markets in a micro-process we term ‘schisming’. Through describing how and why schisming occurs, we make a unique contribution to existing knowledge of the micro-processes of concerned market shaping, and the extent to which economic markets and a concerned society are embedded within each other. Implications for practitioners seeking to bridge social innovation and economic markets include the need to be cognisant of how contextual, socially constructed concerns affect the potential and process of diffusing social innovations.

Possibility of Applying Social Impact Bonds and a Proposed Scheme for Public Transportation in Sparsely Populated Areas of Japan

Possibility of Applying Social Impact Bonds and a Proposed Scheme for Public Transportation in Sparsely Populated Areas of Japan

Sustainable Banking: New Forms of Investing under the Umbrella of the 2030 Agenda

(1) Social Impact Bonds (SIBs) foster the relationships between public and private sectors while adding value to new forms of investment that are closely linked to Socially Responsible Investments (SRIs). In this context, Sustainable Developments Goals (SDGs) aim to strengthen global partnerships in order to achieve the 2030 Agenda. Sustainable banking should consider its role in both new responsible investment products and the 2030 Agenda. This study aims to: (i) estimate the ROI of SIBS, (ii) define a financial formulation and a measurement system, and (iii) explain the relationship between SIBs and SDGs. (2) This research analyzes SIBs from an SDG approach, and proposes a valuation model based on a financial options valuation methodology that clarifies the financial value of the world’s first SIB (Peterborough Prison, UK). (3) Findings suggest that investors expect to have a negative return of 16.48%, and that this expected loss may be compensated for by the short- and long-term positive impact of an intervention in society. (4) It is shown that SIBs provide an opportunity to reach SDG 17 and improve sustainable investment portfolios, while providing an opportunity to strengthen a company’s Corporate Social Responsibility policy and its corporate reputation.

Tackling the Big Questions in Social Impact Bond Research through Comparative Approaches

This special issue of theJournal of Comparative Policy Analysis brings together four cross-disciplinary articles representing the first concerted attempt to combine comparative approaches to extend theoretical and empirical understandings of Social Impact Bonds (SIBs). SIBs are investment-backed payment-by-results projects and have been subject to vigorous academic debate on their appropriateness and efficacy since the first SIB launched in 2010. This introduction to the special issue outlines the state of the academic literature on SIBs, identifying gaps and suggesting five big questions that do not yet have satisfactory answers: (1) What are the administrative or political problems to which SIBs respond? (2) Where and why do SIBs emerge in particular contexts? (3) What is the role of SIBs in the evidence-based policy movement? (4) Is delivering an intervention through a SIB more effective than other means and are associated costs justifiable? (5) Do SIBs catalyse wider organizational, system, or institutional changes? This introduction then summarizes the articles included in this special issue, discusses how they respond to these big questions, and suggests that further comparative research might best address remaining gaps in the literature.