Source: http://www.rockefellerfoundation.org/news/press-releases/rockefeller-foundation-grants-social
The Rockefeller Foundation in a recent announcement said that it is providing a $500,000, two-year grant aimed at supporting Social Finance Inc.’s innovative work in developing the Social Impact Bond (SIB) market in the United States.
“In this economy, as most major American cities and states are facing staggering budget deficits, the Social Impact Bond represents an innovative financing structure that could revolutionize the manner in which persistent social problems are funded and addressed – while linking the government and the private sector in a partnership to save taxpayer dollars,” said Dr. Judith Rodin, President of the Rockefeller Foundation. “As such, we are excited to support Social Finance in testing and developing the Social Impact Bond model here in the United States.”
Social Finance is a Boston-based non-profit organization working to connect the social sector with the capital markets and finance effective nonprofit organizations driving social change. Founded in January 2011, it develops, finances, launches, and manages high-quality SIBs throughout the United States. “We are excited to work with the Rockefeller Foundation, who is a leader in both nurturing innovation and advancing the field of impact investing,” said Tracy Palandjian, CEO of Social Finance. “We are looking forward to adding social impact bonds to Rockefeller’s long legacy of pioneering new fields and leveraging investment capital to improve the lives of the poor and vulnerable and drive social change.”
The Social Impact Bond, a financial instrument, basically aims to align the interests of private investors, entrepreneurial nonprofit service organizations, and governments in an effort to impact poor and vulnerable communities. Investors provide capital to nonprofit organizations to complement existing tools and implement preventive programs aimed at achieving improved social outcomes and reducing governmental expenditure. If an independent evaluator determines that the improved outcomes have been achieved, the government repays investors their principal and a rate of return; otherwise, investors lose their capital.
Policy makers in many states are currently considering the launching of Social Impact Bonds. Massachusetts recently became the first state in the nation to formally explore implementing this new financing tool for effective nonprofit organizations. In its work in Massachusetts, Social Finance has highlighted a number of proven nonprofit preventive programs that could be considered for a SIB, including permanent supportive housing for chronically homeless individuals; housing-based support for homeless families; home- and community-based aging-in-place programs for elders; community-based alternatives to juvenile detention; and alternative community corrections for adult offenders.
Besides Rockefeller Foundation, Social Finance is being supported by The Pershing Square Foundation and the Boston Foundation.
