A general outlook on the business of SIBs awaits in today’s SIB News while I am in Brussels at the Euroclear conference…where remarkably few people have yet heard of SIBs at all…
The Outlook On Pay for Success / Social Impact Bonds
Leilani Barnett – caeconomy
Pay for Success is an approach to funding social service programs designed to improve outcomes and ultimately reduce the costs of addressing these issues. In a Pay for Success contract, private investors provide funding for preventative or interventional services up-front, and government reimburses these investors with a return on their investment, only if results are achieved.
In doing so, private investors take on the initial risk, governments pay based on outcomes, and cost-saving programs with demonstrated effectiveness gain access to new and additional funding sources. Pay for Success projects are underway in several states in the U.S., including California.
The Housing California conference, an annual conference held in April with more than 1,000 participants involved in housing, included an informative session on the outlook on Pay for Success, or Social Impact Bonds, with LeSar Development Consultants, Corporation for Supportive Housing, Third Sector Capital Partners, Santa Clara County, and California State Assemblymember Toni Atkins’ office.
The audience, a mix of affordable housing developers, local government staff, and lenders, were receptive to Pay for Success, interested in learning how it could be applied to their programs, particularly around affordable housing.