A new type of financing is emerging, social impact bonds. As defined by Wikipedia, A Social Impact Bond, also known as a Pay for Success Bond or a Social Benefit Bond, is a contract with the public sector in which a commitment is made to pay for improved social outcomes that result in public sector savings.[1] The first Social Impact Bond was launched by Social Finance UK in September 2010. At Harvard’s Kennedy School of business, they are researching the use and impact of Social Impact Bonds.
For example, social problems like homelessness or repeat offenders in our youth correction are complex situations arising from many factors. These problems require robust thought leadership and partnership to see outcomes that are favorable and impactful to society. At Harvard’s Kennedy School of Government, they are researching the use and impact of Social Impact Bonds. Perhaps we will see similar financing for innovative sustainability programs down the road like water recapturing systems at schools and universities that are used to irrigate athletic fields or community gardens.
To learn more about Harvard’s research, check out this article-
http://harvardmagazine.com/2013/07/social-impact-bonds
