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MICHAEL MCKEE °°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

SOCIAL IMPACT BONDS 101

SOCIAL IMPACT BONDS

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OR, “PAY FOR SUCCESS”

» New, unproven, preventative-type programs may be too expensive for governments to try » Social Impact Bonds are designed to bridge that gap » SIBs’ focus is on outcomes, rather than objectives

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» Traditional social funding addresses objectives and is often remedial in nature

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// TITLE OF PRESENTATION GOES HERE PETERBOROUGH PRISON 5 MILLION POUNDS FROM 17 INVESTORS PROGRAM AIMED AT REDUCING RECIDIVISM

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ISSUES WITH SIBS

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» Programs must be objectively measured to satisfy government and investors » Will SIB risks lead to innovation or recycling of programs? » Investor input into program design and implementation » What kind of return will investors expect and government be in a position to provide?

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» SIB design must meet state laws on debt

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SIBS INVESTORS

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» Foundations, Philanthropies, PDI Managers

SIBS INVESTORS

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» Community Development Financial Institutions and Community Reinvestment Act Banks

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» Foundations, Philanthropies, PDI Managers

SIBS INVESTORS

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» Community Development Financial Institutions and Community Reinvestment Act Banks » Commercial Private Investors

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» Foundations, Philanthropies, PDI Managers

RISK FACTORS

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» Performance: assessing and agreeing on outcomes; finding ways to compare projects

RISK FACTORS

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» Scalability: ensuring pilot projects can be expanded to make investment worthwhile

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» Performance: assessing and agreeing on outcomes; finding ways to compare projects

RISK FACTORS

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» Scalability: ensuring pilot projects can be expanded to make investment worthwhile » Political: projects must survive administration changes; must be non-controversial enough to attract investors; ROI must be politically acceptable

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» Performance: assessing and agreeing on outcomes; finding ways to compare projects

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