Over the last eight years, the use of social impact bonds (SIB) for funding human services has grown. Thirty-two SIBs launched worldwide in 2017, bringing the global total to 108, with an estimated $300 million total investments (see Paying For Social Outcomes: A Review Of The Global Impact Bond Market In 2017).
In Colorado, the first year of the City of Denver’s supportive housing SIB initiative, the outcomes met benchmarks to trigger the first success payment of $188,349 to project investors. In 2016, Denver and eight private investors invested $8.6 million to fund the program to house 250 people over five years.
The city anticipates that it will save $3 million to $15 million over the five-year project (see Denver Supportive Housing Social Impact Bond Initiative Earns The First ‘Success Payment’ For Project Investors). On the other hand, in the U.S., the first social impact bond at Rikers Island did not meet its target, but still had positive outcomes—87% of the target population attended at least one intervention session, and 44% reached a program milestone found in other studies to be associated with positive outcomes.
(To learn more about social impact bonds in progress in 2018, be sure to check out Social Impact Bonds: Over $166 Million In Funding & 20 Programs.) While the evaluation of social impact bonds is still thin, there is enthusiasm for the model and expectations that they will continue. Last year Senator Todd Young (R-IN) introduced the Social Impact Partnerships to Pay for Results Act (SIPPRA), which would provide a $92 million fund through the Department of Treasury, and would allow the Treasury to enter into agreements with state and local governments for SIB partnership projects (see S.963 – Social Impact Partnerships to Pay for Results Act).
SIPPRA was passed in February as part of the Bipartisan Budget Act of 2018. Included in the legislation was plans to release requests for proposals (RFPs) from state and local governments for projects related to reducing utilization of emergency room services for consumers with chronic conditions; reducing the number of children in foster care living in group homes and institutions; reducing homelessness among vulnerable populations; improving the health and well being of consumers with mental health issues; and more. Read more from openminds.com…
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