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The proposed US budget includes money for "Pay for Success Bonds" (known as Social Impact Bonds in the UK) to finance high impact nonprofits. This is a hugely important concept that could finally create a link between nonprofit funding and performance.
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ABOUT SEAN STANNARD-STOCKTON
Sean Stannard-Stockton is the president and chief investment officer of Ensemble Capital Management, located in Burlingame, CA, midway between San Francisco and Silicon Valley. From 2006 through 2012, Sean authored the Tactical Philanthropy blog and wrote regular philanthropy columns for both the Financial Times and the Chronicle of Philanthropy. In 2012, Sean officially ended the blog to focus on growing Ensemble Capital.
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2 Comments
These bonds will not fly.
And here’s why >
http://vanstokkom.blogspot.com/2010/10/social-impact-bonds-why-they-will-not.html
Thanks for sharing your thoughts. I think you raise an important point about measurement. Social impact bonds will only work if an agreed upon method can be found to calculate the cost savings to government (which is the metric that would trigger payments to investors). However, calculating government cost savings is much easier than trying to calculate total social impact, so I’m hopeful that a method that is good enough can be agreed on.