Social Impact Bonds

Results-based financing for preschool catching on, By Adrienne Lu, March 21, 2014, Stateline: “Six hundred 3- and 4-year-olds are attending preschool in Salt Lake County and Park City, Utah, this year thanks to an innovative financing model that is catching the attention of government officials and lawmakers across the country. Under ‘results-based financing,’ also known as ‘pay-for-success’ or ‘social impact bonds,’ private investors or philanthropists provide the initial funding for social programs that are expected to save taxpayer dollars down the road. If the policy goals are met and the savings materialize (according to third-party evaluators), the investors receive their money back with interest. However, the government doesn’t have to pay out more than it saves…”