Social Impact Bonds | FAQ Directory

Social Impact Bonds (SIBs), also known as Pay for Success initiatives, are innovative financing mechanisms designed to fund social programs. Instead of governments directly funding interventions, private investors provide upfront capital. These investors are then repaid by a government or other public body, but only if the program achieves pre-defined, measurable social outcomes. This performance-based model shifts the focus from service delivery to demonstrable results, incentivizing efficiency and effectiveness. SIBs are typically used for complex social problems like recidivism, homelessness, and early childhood education, aiming to deliver better outcomes at a lower cost.