The social impact sector in developed and developing countries needs to innovate their financing structures so that the rising demand for social intervention programming is matched by an expanding supply of capital. The ‘pay for success’ Social Impact Bond (SIB) is one of the frontier efforts of the innovative finance field, which holds the powerful potential to facilitate relationships that motivate partnerships and increase funding that addresses a shared mission. The types of deals which fall under the ‘pay for success’ models have thus allowed the circumstances of the arrangements to dictate the partnership structure. While this breadth is expected and necessary for an innovative concept to test its limits, utility and efficacy, the next wave of engaged practitioners need to take the initiative to evaluate these piloted models within their situational context and create a ‘standardized’ set of practices which respects unique deal circumstances so that the pay for success models can overcome their greatest current barrier to replicability: complexity.

The Social Impact Bond is one of the more widely known ‘pay for success’ models that allows the private sector to inject needed capital into the social impact space by prioritizing the double bottom line of positive fiscal performance and social benefit within the deal structure. The models, briefly explained further below, theoretically satisfy all parties involved in the arrangement, capitalizing on what has traditionally been seen as an inherent contradiction between the private sector and social impact programs — profitability. But will these models achieve their goals in a replicable manner? Can they overcome the dichotomy of that contradiction without losing sight of all involved parties’ objectives?

Read the full article by Lexi Doolittle about social impact programs from Medium