A Social Impact Bond (SIB) is a payment-by-results contract where social investors pay for your organisation to deliver a service – for example, helping homeless people to find a home – and the Government repays the investors with interest if the service is successful. 

SIB Provider Toolkit

SIBs are not "bonds" in the conventional sense. While they operate over a fixed period of time, they do not offer a fixed rate of return. Repayment to investors is dependent upon specified social outcomes being achieved. Therefore in terms of investment risk, Social Impact Bonds are more similar to that of an equity investment

When might I use it?

If your organisation provides or would like to provide a service that delivers measurable social outcomes that could save the Government money. For example, helping people to find jobs or preventing prisoners from reoffending.

Where can I get it from?

As a first step, information is available from the Government’s Centre for Social Impact Bonds or Big Society Capital. Approach them for further guidance if a SIB seems like a good option for you.

Pros

  • Social investors cover the cost of delivering the service so your organisation definitely gets paid
  • Many investors in SIBs will support you to improve the way you deliver your service and help you to measure your impact more effectively

Cons

  • Setting up a SIB can be costly and time-consuming
  • SIBs only work if your organisation delivers a measurable social impact and a commissioner (for example, a council) believes it will save them money

More information