Politics on the Edge: The Instant #1 Sunday Times Bestseller From the Host of Hit Podcast the Rest Is Politics
by Rory Stewart · 13 Sep 2023 · 534pp · 157,700 words
rates. And fine them if they allowed reoffending to increase. Grayling set very few rules on how they should deliver on this version of a ‘social impact bond’, since he felt the incentives and the results were all that was required. On paper this seemed radical and even plausible. Charities and businesses, freed
Disaster Capitalism: Making a Killing Out of Catastrophe
by Antony Loewenstein · 1 Sep 2015 · 464pp · 121,983 words
credentials while receiving federal student aid. Goldman Sachs, a firm with a large measure of responsibility for the economic meltdown in 2008, now invests in social-impact bonds—a system that enriches the company if former prisoners stay out of jail but reduces the accountability of governments and prioritizes private profit. The corporation
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. 33, 34 Sisalem, Aladdin 281 al-Sisi, Abdel Fattah 2 Smart Borders 97 Smart, Frank 209 Smeets, Alice 137 Snowden, Edward 15, 55, 219, 359n32 social-impact bonds 4 social media 75 social sensitivity 21 social spending, cuts 6–7 Solnit, Rebecca 311 Solomon Islands 176, 346n28 Solon, Vivian Alvarez 289 Somalia 26
The Lost Decade: 2010–2020, and What Lies Ahead for Britain
by Polly Toynbee and David Walker · 3 Mar 2020 · 279pp · 90,888 words
safer option. Eventually, the Grayling scheme was scrapped, leaving the shards of an essential public service scattered across the land. Big talk was heard about ‘social impact bonds’, through which private investors would receive a return on their investment in prisons and probation. Despite Whitehall obfuscation, they were exposed as a con, and
Winners Take All: The Elite Charade of Changing the World
by Anand Giridharadas · 27 Aug 2018 · 296pp · 98,018 words
an experimental (and ultimately doomed) $10 million investment in a prison program in New York. Under the terms of a new financial instrument called a “social impact bond,” it would profit if its investee, a prison education program, dramatically cut the recidivism rate. Despite such efforts to win over people of Cohen’s
Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown
by Philip Mirowski · 24 Jun 2013 · 662pp · 180,546 words
inequality could actually be mitigated by further financial engineering. The detailed examples provided in above turn out to be a little underwhelming, such as a “social impact bond” that pays a return if a particular social goal is met, or crowdfunding of public investment projects. But, just as with geoengineering, the nitty-gritty
The Purpose Economy: How Your Desire for Impact, Personal Growth and Community Is Changing the World
by Aaron Hurst · 31 Aug 2013 · 209pp · 63,649 words
announcement of the multi-billion-dollar Institute for Sustainable Investing. Finance is slowly changing to thrive in the new economy. Several states are experimenting with social impact bonds, and others are experimenting with new governance structures to address the financing needs of organizations that don’t neatly fit into commercial or nonprofit categories
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organization in the early 1990s and failing to implement technology. Little of this is truly new, of course. Farmers’ markets existed long before chain stores. Social impact bonds appeared in Israel in the midcentury. During the 1960s in the United States and Europe, there existed several large-scale experiments with communal ownership. Mother
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by state legislatures, and as of this writing, eleven states have done so, from Maryland to Hawaii. New investment models are being pioneered as well. Social impact bonds, as described earlier, are another potentially powerful type of hybrid innovation. An interesting approach to this kind of investment blending is being practiced by the
Smart Money: How High-Stakes Financial Innovation Is Reshaping Our WorldÑFor the Better
by Andrew Palmer · 13 Apr 2015 · 280pp · 79,029 words
LEARNED 1. Handmaid to History 2. From Breakthrough to Meltdown 3. The Most Dangerous Asset in the World PART II: A FORCE FOR GOOD 4. Social-Impact Bonds and the Shrinking of the State 5. Live Long and Prosper 6. Equity and the License to Dream 7. Peer-to-Peer Lending and the
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—the entrepreneurs who are now driving finance forward and some of the issues they are trying to solve. PART II: A FORCE FOR GOOD 4. Social-Impact Bonds and the Shrinking of the State Innovative Finance Expert Saves Struggling Zoo by Letting Guests Feed, Eat the Animals —The Onion Martinez Sutherland is in
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-rehabilitation program that is attracting attention around the world because of the way it is being financed. Peterborough is home to the world’s first “social-impact bond.” A SIB works by using private investors to fund social programs, particularly ones that are designed to intervene in people’s lives before they go
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future streams of cash—can be used to do good. *** SIR RONALD COHEN is the man who has done more than anyone else to get social-impact bonds off the ground. Sir Ronald made his name getting a different financial industry started. In 1972, at the age of twenty-six, he cofounded the
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Finance assist the social organization as it went along, a transaction like this could add management skills as well as money. The skeleton of a social-impact bond now existed on paper. A chance conversation with someone who pointed out the amount of data that already existed on prisoners steered the team at
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of prisoner recidivism. So in 2010 Sir Ronald and others went to Britain’s Ministry of Justice to present the idea of a £12 million social-impact bond to fund rehabilitation programs for ex-prisoners at three prisons. As Sir Ronald tells it, the Labour justice minister at the time, Jack Straw, listened
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by weaning him onto methadone. It takes time, effort, and committed funding. Ideas for SIBs are not just coming from the public sector. The first social-impact bond to be arranged by nonprofit organizations is in the field of adoption. A group of eighteen British voluntary adoption agencies is using a SIB to
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” set up by Jeffrey Liebman, a professor of public policy at Harvard University’s Kennedy School of Government, which has been providing technical assistance on social-impact bonds to state authorities in New York and Massachusetts. Liebman set up the lab after looking into the Peterborough bond. Demand for his services is high
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PEOPLE about SIBs is their potential to channel sustainable funding to social programs that have the best outcomes. By using the mechanics of the market, social-impact bonds align the incentives of several different parties: the government entities that commission services, the social organizations that provide those services, and the investors that supply
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over the cash at the start of the contract, then taxpayers still end up spending money even if outcomes are disappointing. The promise of the social-impact-bond arrangement for governments is thus threefold: a payment structure that is based on outcomes, casts those payments into the future, and transfers the risk of
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money is likely to keep on coming.6 *** LET’S SPIN THE ISSUE around to look at SIBs from the investors’ perspective. For philanthropists, the social-impact bond enables greater rigor in how they deploy their money. Rather than handing cash over to a provider and hoping for the best, the investor gets
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Ronald would recognize, is not dissimilar to the reports that private-equity investors receive on the firms owned by their funds. But the idea behind social-impact bonds, and behind impact investing in general, is not just that this is a better way of measuring outcomes. It is also that financial returns will
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, it will nonetheless fall below the target specified in the Peterborough contract, and the investors will lose all their cash. It may be called a social-impact “bond,” but it functions much more like risk-taking equity capital. That bargain might work for a bunch of committed charitable foundations and philanthropic individuals. One
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improved image of the donor in the eyes of others. If people give to feel and look saintly, then monetary incentives of the sort that social-impact bonds dangle may actually do more harm than good. Angels aren’t supposed to get paid, after all. Getting a financial return muddies the signal that
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and prisons are going to be mentioned in the same sentence, many think it ought to be for different reasons than a social-impact bond. Anders Lustgarten, a playwright, has already made social-impact bonds the villain of If You Don’t Let Us Dream, We Won’t Let You Sleep, a play that ran in
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to deepen, an entire infrastructure of contracts, prices, and participants has to develop. Sir Ronald had to beaver away for ten years before the first social-impact bond was launched. Each instrument that has followed has been the fruit of slow negotiations between investors, providers, commissioners, and intermediaries. They have taken months to
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. The indispensable elements of public-service provision—health-care services, above all—are gobbling up ever more money, squeezing funding for discretionary prevention-based programs. Social-impact bonds will never be the only answer to the problem of the shrinking state. But they are an extremely promising avenue to explore. Just ask Martinez
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-time home buyer, 84 average house price, 74 banking crisis, 69 equity-crowdfunding, 154 government spending, 99 life expectancy, 125 peer-to-peer lending, 181 social-impact bonds (SIB), 95–97 student indebtedness, 171 total residential property value, 69–70 Brown, Gordon, 93 Bucket price (okenedan), 40 Bullae (early financial contracts), 5 Bush
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, 15 France collapse of Mississippi scheme in, 36 eighteenth century life annuities in, 20–21 government spending in, 99 Freddie Mac, 48, 85 Fresno, California, social-impact bond pilot program in, 103–104 Friedman, Milton, 165 Friendsurance, 182–183 Fundamental sellers, 54–55 Funding Circle, 181–182, 189, 197 Futures, 29, 39–40
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Implied volatility, 116 Impure altruism, 109–110 Income-share agreements, 167, 172–178 Independent variables, 201 Index funds, 40 India, CDS deals in, 37 India, social-impact bonds (SIBs) in, 103 Industrialization, effect of on finance, 3, 27–28 Inflation-protected Treasury bills, 131 Information asymmetry, 174 Innovator’s dilemma, 189 Instiglio, 103
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, 15–16, 55 MarketInvoice, 195, 207, 217–218 Marketplace lending, 184 Markowitz, Harry, 118 Massachusetts, use of inflation-protected bonds in, 26 Massachusetts, use of social-impact bonds in, 98 Matching engine, 52 Maturity transformation, 12–13, 187–188, 193 McKinsey & Company, ix, 42 Mercator Advisory Group, 203 Merrill, Charles, 28 Merrill, Douglas
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) small business loans, 181 SoFi, 184 student loans, 182 Zopa, 181, 187, 188, 195 Pensions, cost of, 125–126 Perry, Rick, 142–143 Peterborough, England, social-impact bond pilot in, 90–92, 94–95, 104–105, 112 Petri, Tom, 172 Pharmaceuticals, decline of investment in, 114–115 Piracy Reporting Centre, International Maritime Bureau
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equity, 80–84 Shared-equity mortgage, 84 Shepard, Chris, xii–xiii Shiller, Robert, xv–xvi, 242 Shleifer, Andrei, 42, 44 Short termism, 58 SIBs. See Social-impact bonds Sims, Kath, 96 Single-family-home rental sector, 85 Single-family rental bond, 85 Skype, 190 Sleeping sickness, SIB program for elimination of, 103 Small
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businesses, as marginal borrowers, 215–219 Smart money, comparison of to dumb money, 155–158 SmartNest, 129–131, 211 Social Finance, 93, 97 Social-impact bonds (SIBs) benefits of, 91, 98–102, 104, 106 in Britain, 95–97 cost-effectiveness of, 100–102 data collection, 104 defined, 90 financial incentive, effect
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, 90–91, 94–95, 104–105, 107 philanthropists, role of, 108 possible abuses of, 111 purpose, 107 risk management in, 108 in United States, 98 Social-impact bonds (SIBs), uses for accomodation for homeless people, 96–97, 106–107 adoption of hard-to-place children, 97 cutting HIV infection rates in Swaziland, 103
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, 180 Suppa, Enrico, 9 Sutherland, Martinez, 89–90, 95, 105, 112 Svenska Handelsbanken, 206–207 Swaps, credit-default, 29–30 Swaps, interest-rate, 29 Swaziland, social-impact bonds (SIBs) in Sweden, banking crisis in, 75 Syndicated loans, 41 Tail risks, 221, 237 Tanzania, financial liberalization and, 34 Testosterone and cortisol, effect of on
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, 190–192 Trente demoiselles de Genève, 22 True Link Financial, 144 Tufano, Peter, 59, 213–214 Tulipmania, 33, 36 Tversky, Amos, 137 UBS, 60 Uganda, social-impact bonds (SIBs) in, 103 Unbanked households, 200 United States aggregate value of property, 69 consumer debt, 183, 204 corporate debt, 120 cost of diagnosed diabetes, 102
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, 120 mortgage debt, 69 nonprofits in, 105–106 prepaid cards, 203 property bubbles, 74–75 real estate cycles, 237 savings-and-loan crisis (1990s), 30 social-impact bonds (SIBs), 98 student debt, 169 Unsecured lending, 206 Upstart, 166–168, 173, 175, 182 Used-car market, use of heuristics in, 46 Vega, Joseph de
Poverty for Profit
by Anne Kim · 384pp · 112,825 words
it’s a motive powerful enough to override even the best of intentions. A case in point: Salt Lake County, Utah’s 2013 experiment with “social impact bonds” to finance preschool for disadvantaged children. As originally conceived, the Utah plan was brilliant, bold, and potentially revolutionary. To finance an expansion of Salt Lake
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of Salt Lake $7 million over five years to reach an additional 3,500 children.4 The county would repay the loans (i.e., the social impact bonds) only if the program met certain metrics for “success”—namely, the avoidance of special education, which cost $2,470 per child per year. If all
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with disabilities.9 Documentarian Nadine Pequeneza, who spent three years studying a similar preschool initiative in Chicago, concluded in the Stanford Social Innovation Review that social impact bonds “might be doing more harm than good.”10 The Utah experiment illustrates the private sector’s limited capabilities in social policy. For one thing, as
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Pequeneza points out, instruments like social impact bonds promote “simplistic solutions to complex problems.”11 It’s impossible to solve a multi-faceted problem like poverty with a narrow set of “market incentives
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.acf.hhs.gov/sites/default/files/public/utah_profile.pdf. 5. Ibid. 6. Anne Kim, “Mayor Ben McAdams of Salt Lake County: Financing Preschool with ‘Social Impact Bonds,’” Republic 3-0.com, March 2014, https://web.archive.org/web/20160320232709/http://republic3-0.com/qa-paying-for-success-in-salt-lake-county/. 7
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School Program Funded by Goldman,” New York Times, November 3, 2015. 8. Ibid. 9. Allison E. Tse and Mildred E. Warner, “The Razor’s Edge: Social Impact Bonds and the Financialization of Early Childhood Services,” Journal of Urban Affairs 42, no. 6 (2020): 816–32, https://doi.org/10.1080/07352166.2018.1465347
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. 10. Nadine Pequeneza, “The Downside of Social Impact Bonds,” Stanford Social Innovation Review, May 13, 2019, https://ssir.org/articles/entry/the_downside_of_social_impact_bonds. 11. Ibid. 12. “What Does a High-Quality Preschool Program Look Like?,” National Association for the Education of
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–9, 113–18; and Medicaid managed care, 127; neighborhood schools of rental voucher holders, 196; oral/dental health disparities, 106–7; poverty rates, 5, 6; “social impact bonds” experiment to finance early childhood education, 222–24; tax credits and, 13–14, 27. See also Medicaid dentistry; National School Lunch Program Children’s Health
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Knowledge (O’Connor), 93–94 Premier, Inc./US Foods, 213 Prepare + Prosper, 19, 20 preschools (early childhood education): Head Start, 71; Salt Lake County’s “social impact bonds” experiment, 222–24 President’s Commission on Privatization (1988), 45 pretrial detention, 154–55, 161–62, 163–71. See also bail bonds industry; home detention
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, 198, 199 Ruark, Peter, 57, 58 Rural Health Information Hub, 109 Sacramento County, California, 166 SAIC (information technology firm), 34 Salt Lake County, Utah’s “social impact bonds” experiment, 222–24 Sanders, Bernie, 30 Sanger, M. Bryna, 35–36, 53 Sarah Lee Foodservice, 218 Satellite Tracking of People (STOP), 169 Savas, Emanuel S
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., 278n28 Small Smiles, 105, 109–11, 113–16 Smith, Steven Rathgeb, 42 SNAP. See Supplemental Nutrition Assistance Program (SNAP) SNAP Farmers Market Coalition, 320–21n100 “social impact bonds,” 222–24 Social Security, 42, 60, 193 Sodexo, Inc., 217 Solar Landscape (New Jersey), 86 Soros, George, 124 Southern New Hampshire University (SNHU), 81 special
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U.S. Renal Care (District Heights, Maryland), 2, 135 U.S. Renal Data Service, 139, 292n235 Utah: Job Corps centers, 94; Salt Lake County’s “social impact bonds” experiment, 222–24 Ventry, Dennis J., Jr., 17 Veterans Administration, 44–45 Virginia: bail statute and bail bonds industry, 160; dollar store grocery sales, 209
Impact: Reshaping Capitalism to Drive Real Change
by Ronald Cohen · 1 Jul 2020 · 276pp · 59,165 words
was shifting from one where decisions were made on the basis of risk and return to one where impact was an essential third dimension. The Social Impact Bond (SIB) – a new way of investing that ‘did well’ at the same time as ‘doing good’ – was the first expression of this fundamental change. Our
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breakthrough in impact thinking came in September 2010, when for the first time we linked the measurement of social impact to financial return. The first social impact bond (SIB), the ‘Peterborough SIB’, tackled the reoffending rate of young male prisoners released from Peterborough jail in the UK. Until the arrival of SIBs, conventional
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way in which venture capital had brought investors to fund the growth of start-ups. Working with Toby, Emily and David Hutchison, we designed the social impact bond as an investment instrument that would be capable of bringing investment to charitable social delivery organizations. Armed with our proposal, which set out how the
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profit. It was a win-win-win situation. Viewing social challenges from the perspective of both delivery organizations and investors brought us to design the social impact bond (SIB) as a tool that helps social entrepreneurs accelerate social progress through the use of private investment. One of the first people to realize the
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organizations that would tackle social issues close to his heart. Coming from such a dedicated philanthropist, his words provided great encouragement for our endeavor. The Social Impact Bond Social impact bonds involve three key players: outcome payers, social service providers (these are generally non-profit organizations, but they can also be purpose-driven businesses) and investors
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and efficient ways in order to achieve them. When we set out at Social Finance to reduce reoffending rates in the UK, we created the social impact bond described above. Our investors were 17 charitable foundations, including the Esmée Fairbairn Foundation in the UK and the Rockefeller Foundation in the US. We met
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an impact investment achieves and are used by local commissioners, charitable organizations and social enterprises to inform outcome-based contracting and the terms offered by social impact bonds.12 Some governments, like Portugal’s, have followed the UK’s lead, and some independent efforts are being made in parallel to quantify the cost
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have a momentous effect, just as risk thinking did previously: investment portfolios will change to deliver measurable social and environmental impact alongside financial returns. The social impact bond, which we looked at in Chapter 1, is a good example of impact investment innovation. Since a SIB’s return is based on the achievement
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non-profits enables philanthropy to adapt some of businesses’ best tools – and use them to make the biggest possible impact on society and the environment. Social Impact Bonds: The Catalyst Impact philanthropy, which takes many forms, offers a new alternative to conventional grant-making. The most prominent catalyst of these new approaches is
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the Social Impact Bond (SIB). When the first one was introduced in 2010, it turned conventional philanthropic wisdom on its head. The SIB demonstrated that it was possible to
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. SIB funds are appearing on the scene and starting to show what they can achieve. In the UK, Bridges Fund Management raised the first two social impact bond funds in the world, in 2013 and 2019. With a combined value of £60 million ($79.8 million),10 these funds, which include institutional investors
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focus on outcomes, and the launch of SIBs is most often the best place for them to start doing so. The French government began launching social impact bonds, or ‘social impact contracts’ as they are known there, in 2016. There are currently six confirmed French SIBs. The first, led by Adie, issues microloans
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Paul Ryan and Todd Young have joined with Democrats like John Delaney to include $100 million in the US budget to fund outcome payments for social impact bonds.49 Spending for service provision on the basis of the outcomes achieved appeals to some politicians because it focuses government expenditure on achieving results in
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investor, also known as an individual investor, is a non-professional investor who buys and sells securities or funds through traditional or online brokerage firms. Social Impact Bond (SIB) A SIB, which is known as a PFS (pay for success) in the United States, an SBB (social benefit bond) in Australia and a
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-peace-prize-20170801 9 https://www.brookings.edu/research/impact-bonds-in-developing-countries-early-learnings-from-the-field/ and https://www.gov.uk/guidance/social-impact-bonds#uk-government-outcomes-funds-for-sibs 10 https://www.wired.com/2015/03/opinion-us-embassy-beijing-tweeted-clear-air/ 11 http://eprints.lse.ac
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.uk/65393/1/Assessing%20social%20impact%20assessment%20methods%20report%20-%20final.pdf 12 https://www.gov.uk/guidance/social-impact-bonds 13 http://www.globalvaluexchange.org/ 14 http://www.globalvaluexchange.org/valuations/8279e41d9e5e0bd8499f2da3 15 https://www.unpri.org/signatories/signatory-directory 16 https://www.blackrock.com
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.co.uk/british-asian-trust-announces-worlds-largest-impact-bond-education/finance/article/1492576 52 https://www.frbsf.org/community-development/files/rikers-island-first-social-impact-bond-united-states.pdf 53 https://www.goldmansachs.com/media-relations/press-releases/current/gsam-announcement-7-13-15.html 54 https://www.fa-mag.com
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/43036/411404-Building-a-Common-Outcome-Framework-To-Measure-Nonprofit-Performance.PDF 4 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/486512/social-impact-bond-pilot-peterborough-report.pdf 5 https://metro.co.uk/2017/08/10/what-happens-when-you-finally-get-released-from-jail-one-former-prisoner-explains
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.brookings.edu/wp-content/uploads/2019/01/Global-Impact-Bonds-Snapshot-March-2020.pdf 8 Ibid. 9 Ibid. 10 https://www.bridgesfundmanagement.com/uks-first-social-impact-bond-fund-achieves-final-close-25m/ and www.bridgesfundmanagement.com/bridges-closes-second-social-outcomes-fund-at-extended-hard-cap-of-35m/ 11 https://www.bridgesfundmanagement
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-reporting-directive/ 5 https://www.globalelr.com/2019/04/eu-issues-new-sustainable-investment-disclosure-rules/ 6 Ibid. 7 https://www.gov.uk/government/publications/social-impact-bonds-unit-cost-data 8 http://gsgii.org/wp-content/uploads/2018/10/GSG-Paper-2018-Policy.pdf 9 https://onevalue.gov.pt/?parent_id=25
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/news/opinion-the-impact-imperative-for-sustainable-development-finance-94142 49 https://www.responsible-investor.com/home/article/pay_for_success_the_latest_thinking_on_social_impact_bonds/ Chapter 7: The Invisible Heart of Impact Capitalism 1 https://news.rpi.edu/luwakkey/2902 2 According to the Securities Industry and Financial Markets Association
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152–3 impact measurement and 118–21 measuring impact in 120–1 new crop of foundations 146–52 Outcome Funds and 134–8, 203 SIBs (Social Impact Bonds) and 121–30, 205 Phillips, Andi 127 Pioneers French Impact 175–6 PlantBottle 91 plastic 90, 91, 92, 97, 101–3, 104 PME (Dutch pension
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v, 19–20, 22, 23, 25, 26, 235 Social Finance Israel 163 Social Finance US 26, 127, 148 Social Impact Accelerator (SIA), EU 176–7 Social Impact Bond (SIB) 6, 8, 20–8, 67, 78, 80, 179, 198, 204–5 global spread of 25–8, 124–30 government and 122–4, 125, 126