Pay for success government discussed while an article discusses just how much of a year for impact investing this is…
A Government That You Pay For Success
Leonard Gilroy – Orange County Register
“Pay-for-success” isn’t exactly what comes to mind when thinking of how California government spends tax dollars, so we take special notice when legislators in Sacramento pass bills based on the concept.
Earlier this year the Senate passed – and the Assembly is now considering – Senate Bill 593, which would create a new “pay-for-success” pilot program for social impact partnerships. The idea is for the government to tap private sector dollars and expertise to advance new, evidence-based approaches to better address issues like child abuse and neglect, education, homelessness and recidivism.
Is 2014 Really The Year Of Impact Investing?
Beth Sirull – Triple Pundit
Earlier this year, on this forum, I proclaimed that 2014 would be The Year of Impact Investing. Now that half the year is in the history books, it’s fair to ask if 2014 is living up to that billing. Let’s take a look at what the first six months of the year have produced:
Alongside initiatives by mainstream private investors to catalyze financial markets, there have been accelerated efforts to inform design of more effective policy to drive private capital for social impact. An important step towards this outcome here in the U.S. has been the work of the United States National Advisory Board (NAB) on impact investing.
The U.S. NAB consists of a group of 27 thought leaders including private investors, entrepreneurs, foundations, academics, intermediaries and nonprofits. The NAB released its final report, Private Capital, Public Good: How Smart Federal Policy Can Galvanize Impact Investing – and Why It’s Urgent, last month. As part of the report launch, the White House convened a Roundtable on Impact Investing, where more than 20 private corporations and foundations announced a total of over $1.5 billion in new impact investments. These include:
Prudential Financial committed to building a $1 billion impact investing portfolio by 2020 to eliminate barriers to financial and social mobility.
The McKnight Foundation and the Rockefeller Brothers Fund committed to allocating at least 10% of their endowments — $200 million and $84 million respectively — to impact investments.
The Omidyar Network committed $100 million in early-stage risk capital over the next three years to new impact investments that will benefit underserved communities around the globe, enhancing financial inclusion, improving education, and using internet and mobile technologies to create positive social change.
The Ford Foundation committed $9 million to impact investments that will increase economic mobility and opportunity for low-income Americans.
Of course, $1.5 billion in impact investing commitments from 20 investors is a great start, but for impact investing to have long-term legs, we need more, both in the U.S. and abroad.