Episode Nine of our new podcast series, “Money + Meaning: Unlikely Allies Building New Markets for Impact” is now available!
Money + Meaning Episode 9: Recorded Live at SOCAP 365 Seattle: Social Impact Bonds–What’s Brilliant and What’s Broken
In 2012, the United States saw the debut of the country’s first social impact bond: a $9.6M loan made in a public-private partnership (involving the City of New York, Goldman Sachs Bank, MDRC, the Osborne Association, and Bloomberg Philanthropies) to fund a program that would provide Moral Reconation Therapy to prisoners ages 16-18 serving time at Rikers Island. Because it was an outcomes-based loan, the investment would only be repaid if the program achieved its intended impact goal: a significant drop in the recidivism rate.
Because social impact bonds are contracted on a Pay for Success basis (earning revenue through outcomes, instead of fee-for-service), they were initially celebrated as a way for the public sector to improve outcomes of government funding and scale solutions through private capital. However, the excitement about this new financial instrument sometimes translated into unrealistic expectations and frustrations when the model did not work. Though the Riker’s Island program did not achieve its impact goal, other social impact bonds have yielded successful outcomes. Over the years since that first social impact bond in the U.S., we have seen significant evolution in Pay for Success financing and active projects around the country in health, education, housing, and more.
Episode nine of the Money + Meaning podcast, recorded live at a SOCAP 365 event at Impact Hub Seattle, features an expert panel discussing the mechanics of pay for success financing, along with innovative ways that creative public-private collaborations are driving greater efficiency and incentivizing measurable outcomes in Seattle and nationally.
Host: Lindsay Smalling
- What Matters: Investing in Results to Build Strong, Vibrant Communities, a project of the Federal Reserve Bank of San Francisco and Nonprofit Finance Fund. The book features essays by dozens of leaders, exploring the possibilities of an outcomes-based world.
- Rikers Island: The First Social Impact Bond in the United States by John Olson and Andrea Phillips
- Paying for social outcomes: A review of the global impact bond market in 2017: The Brookings Institute
About Money + Meaning
Money + Meaning is the official podcast of SOCAP. This series aims to expand the conversation around impact investing and strategies to finance and support social change while stimulating innovative and valuable new partnerships across sectors.